Oil drops to a 2-week low as US gasoline inventories and crude output climb
Crude prices post biggest one-day fall since March 8
Oil fell to a two-week low on Wednesday, after a surprising build in US gasoline inventories and a rise in domestic crude output that is partially offsetting cutbacks by other countries trying to reduce a global glut.
US crude futures settled down US$1.97 to US$50.44 a barrel, a 3.8 per cent drop, the biggest one-day decline since March 8. Brent crude settled down 3.6 per cent, or US$1.96 a barrel, to US$52.93.
US crude stocks fell 1 million barrels in the latest week, the US Energy Information Administration said, a smaller draw than expected. Gasoline stocks posted a counter-seasonal build of 1.5 million barrels, despite heavier refining activity.
The surprise gasoline build, along with an increase in US production and imports from OPEC nations, pressured prices. Weekly imports from OPEC nations rose by 900,000 barrels, the EIA said.
“Inventories remain stubbornly high,“ said Gene McGillian, manager of market research at Tradition Energy in Stamford, Connecticut. He added that as the United States is approaching the summer driving season, ”the build in gasoline points to the fact demand isn’t as strong as we expected.”
