Nymex Crude Drops to 2013 Low as Stockpiles Rise
U.S. crude futures fell 2.5% Thursday to the lowest settlement this year after weekly government data showed an increase in domestic oil stockpiles.
The Energy Information Administration said oil stockpiles increased by 4.1 million barrels last week, above analysts' average forecast of a 1.7-million-barrel increase. The rise sent total stockpiles to 376.4 million barrels, the highest level since July, as an increase in both imports and domestic output coincided with a fall in refinery operations.
Crude stockpiles are at the highest level for this week since the EIA began keeping data in 1982.
"Inventory levels are still very high, and demand still stinks," said Kyle Cooper, managing partner at IAF Advisors in Houston, who said declines could continue as more traders retreat from bullish bets.
The figures, coupled with weak data on U.S. jobs and the euro-zone economy, raised concerns among oil investors that a tepid economic outlook and rising fuel prices could lower oil usage.
Light, sweet crude for April delivery settled $2.38 lower at $92.84 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange for April delivery settled $2.07, or 1.8%, lower at $113.53 a barrel.
Gasoline futures also settled lower despite a decline in stockpiles of the fuel. Stockpiles fell by 2.9 million barrels, the EIA said, a larger drop than the 700,000-barrel decline analysts expected. Stocks of distillate, which include heating oil and diesel, fell by 2.3 million barrels.
"It's bearish for crude and bullish for refined products," said Dominick Chirichella, an analyst at the Energy Management Institute, noting that the stockpile decline in gasoline is "adding fuel to the fire" that lower supplies in the Northeast could keep prices elevated.
Futures for front-month March reformulated gasoline blendstock, or RBOB, settled at a five-month high earlier this week.
RBOB settled 2.30 cents, or 0.8%, lower at $3.0365 a gallon.
The data followed weak economic data earlier Thursday. The Labor Department said U.S. jobless claims rose last week, highlighting the slow recovery in the labor market. Additionally, the decline in euro-zone business activity accelerated in February, according to data compiler Markit, which economists say likely means the bloc's economic contraction will continue through the first quarter.
Oil markets are tied to the global economic outlook, as weak growth typically results in sagging demand for gasoline, diesel and other fuels.
March heating oil settled 6.06 cents, or 1.9%, lower at $3.0957 a gallon.
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