Oil Drops After EIA Shows US Supplies are Higher than Expected

West Texas Intermediate crude fell to a one-month low as an Energy Information Administration report showed U.S. supplies rose three times as much as expected and refineries operated at the lowest rate in four months.

Prices fell for a third day. Crude stockpiles expanded by 6.18 million barrels last week, the EIA, the Energy Department’s statistical arm, said. Analysts surveyed by Bloomberg forecast a gain of 2 million. Refinery utilization slipped 1.4 percentage points to 86 percent of capacity. Brent’s premium over WTI grew to more than $9 a barrel.

“The market is under pressure,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “Inventories are likely to continue to build.”

WTI for April delivery declined $1.23, or 1.2 percent, to $98.80 a barrel at 10:41 a.m. on the New York Mercantile Exchange after falling to $98.15, the lowest intraday level since Feb. 7. The volume of all futures traded was more than double the 100-day average.

Brent for April settlement decreased 41 cents, or 0.4 percent, to $108.14 a barrel on the London-based ICE Futures Europe exchange. Volume was 41 percent above the 100-day average. The European benchmark crude was at a premium of $9.34 to WTI, up from $8.52 yesterday.

via Bloomberg

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