Oil price declines as U.S. crude stockpile gain adds to glut

WASHINGTON, D.C. (Bloomberg) -- Oil maintained its decline after a U.S. government report showed rising crude stockpiles kept supplies at the highest level in more than eight decades.

 

Crude inventories rose 9.36 MMbbl last week, according to the Energy Information Administration. A 2.53 MMbbl supply increase was projected by analysts surveyed by Bloomberg. Stockpiles at Cushing, Oklahoma, the biggest U.S. oil-storage hub, dropped 1.26 MMbbl from a record high.

 

"This highlights the fact that those expecting a tightening market are still just hoping," said Kyle Cooper, director of research with IAF Advisors and Cypress Energy Capital Management in Houston. "I agree that we’ll eventually see a tightening, but there’s no evidence it’s happening yet."

 

Oil slumped to a 12-year low this year before rising on speculation that stronger demand and falling U.S. output will ease the global surplus. There’s potential for supply shocks in the future after energy companies from Chevron Corp. to BP Plc cut billions of dollars in spending amid the price crash, according to the International Energy Agency.

 

West Texas Intermediate oil for May delivery dropped $1.02, or 2.5%, to $40.43/bbl at 10:33 a.m. on the New York Mercantile Exchange.

 

Brent for May settlement fell 92 cents, or 2.2%, to $40.87/bbl on the London-based ICE Futures Europe exchange.

 

The gain left U.S. crude stockpiles at 532.5 MMbbl, the highest level since 1930, according to EIA data.