Oil Falls On High Supplies

West Texas Intermediate crude fell for a third day as U.S. inventories increased and on speculation that tension between Ukraine and Russia won’t disrupt supplies. The WTI-Brent spread grew to the widest in a week.

Prices dropped as much as 1.3 percent in New York. Stockpiles gained for a seventh week, the government said yesterday, as demand for gasoline and diesel slid. Crimean lawmakers called a March 16 referendum to decide whether to join Russia or stay with Ukraine as European leaders gathered for an emergency summit in Brussels. Futures have declined more than $4 from a five-month high on March 3.

“The inventory report showed a build and that kind of pointed to weak demand,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “We are having reduced risk premium from Ukraine. It seems like the rally has failed and we could test the $100 mark.”

WTI for April delivery dropped $1.15, or 1.1 percent, to $100.30 a barrel at 1:13 p.m. on the New York Mercantile Exchange after touching $100.13. The volume of all futures was about 42 percent more than the 100-day average.

via Bloomberg

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