WTI oil hits fresh 6-year low after bearish U.S. supply data
Investing.com - West Texas Intermediate oil futures fell to the lowest level since March 2009 on Wednesday, after data showed that oil supplies in the U.S. rose to the highest level on record, exacerbating fears over a glut in supplies.
On the New York Mercantile Exchange, crude oil for delivery in April slumped $1.08, or 2.49%, to trade at $42.38 a barrel during U.S. morning hours. Prices were at around $42.70 a barrel prior to the release of the inventory data.
Meanwhile, the May Nymex contract was down 84 cents, or 1.85%, at $44.35 a barrel, compared to $44.52 ahead of the report.
The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories rose by 9.6 million barrels in the week ended March 13, compared to expectations for an increase of 3.8 million barrels.
The report also showed that total motor gasoline inventories decreased by 4.5 million barrels, compared to expectations for a drop of 0.9 million, while distillate stockpiles increased by 0.4 million barrels.
Total U.S. crude oil inventories stood at 458.5 million barrels as of last week, the most in at least 80 years, indicating that cheap prices have yet to affect output.
According to industry research group Baker Hughes (NYSE:BHI), the number of rigs drilling for oil in the U.S. fell by 56 last week to 866, the 14th straight week of declines.
The number of working U.S. oil rigs is 46% lower than an all-time high of 1,609 hit in October.
Market players have been paying close attention to the shrinking rig count in recent months for signs it will eventually reduce the glut of crude flowing into the market.
Concerns over diminishing spare capacity to store excess oil in the U.S. and China also weighed, according to market participants.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for May delivery declined 35 cents, or 0.64%, to trade at $53.17 a barrel.
London-traded Brent prices touched $52.57 on Tuesday, the lowest level since February 2, before closing at $53.51, down 43 cents, or 0.8%.
Meanwhile, the spread between the Brent and the WTI crude contracts stood at $10.79 a barrel, compared to $8.32 by close of trade on Tuesday.
Oil prices have fallen sharply in recent months as OPEC resisted calls to cut output, while the U.S. pumped at the fastest pace in more than three decades, creating a glut in global supplies.
Elsewhere, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.1% to 99.92, moving away from recent 12-year peak of 100.77.
Market participants were looking ahead to Wednesday’s Federal Reserve statement to see if it would drop its reference to being patient before raising rates.
Traders would interpret such a move as a sign that the central bank could raise rates as early as its June monetary policy meeting.
