MW: Oil falls on bigger-than-expected inventories gain
Futures change course as U.S. inventories rise to highest level in 18 years
Crude-oil futures turned lower Wednesday as government data showed U.S. crude inventories rose much more than expected last week to the highest level in more than 18 years as demand fell.
Crude inventories rose 5.6 million barrels in the week ended April 10, the Energy Information Administration reported. Analysts surveyed by Platts had expected an increase of 2.5 million barrels. Meanwhile, total petroleum demand over the past four weeks fell by 5.2% from a year ago.
Crude for May delivery lost 31 cents, or 0.6%, to $49.10 a barrel on the New York Mercantile Exchange. It was up more than 1% ahead of the petroleum data.
"The EIA reports don't get much more bearish than this," said James Williams, an economist at energy research firm WTRG Economics. "Stocks of crude, gasoline and distillates are far above the high end of the normal range and consumption is lower."
At 366.7 million barrels, U.S. inventories stood at the highest level since September 1990. The EIA also reported that gasoline inventories fell by 900,000 barrels last week, as refineries reduced production, and distillate stockpiles, which include diesel and heating oil, fell by 1.2 million barrels.
Analysts surveyed by Platts had expected declines of 960,000 barrels for gasoline and 1.5 million barrels for distillates.
U.S. refineries operated at 80.4% of their operable capacity, the EIA said, the lowest level since September 2008.
Late Tuesday, the American Petroleum Institute reported an increase of 6.5 million barrels in crude stockpiles for the week ended April 10. API, which uses a different methodology, also reported a decline of 613,000 barrels in gasoline stocks and an increase of 87,000 barrels in distillate supplies.
In other energy trading, May reformulated gasoline fell 1.1% to $1.4419 a gallon and May heating oil lost 1.2% to $1.3851 a gallon. May natural-gas futures fell 1.4% to $3.638 per million British thermal units.
On Wall Street, U.S. stocks fell, pressured by Intel Corp.'s cautious outlook and disappointing earnings results from UBS AG cautious outlook and disappointing earnings results from UBS AG
