Crude dropped after an industry report showed that U.S. oil stockpiles climbed to a nine-month high as output held at the highest level in more than two decades.
Futures in New York fell as much as 0.8%. The American Petroleum Institute said yesterday that supplies climbed 4.7 million barrels to 385.1 million, the most since June. An Energy Information Administration report today probably will show inventories rose 2.1 million barrels, according to a Bloomberg survey. Exxon Mobil Corp.’s Pegasus pipeline, linking the U.S. Midwest to Texas refineries, will remain shut until regulators are satisfied with repairs.
“The API numbers were clearly not good for the crude market,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $1.4 billion. “Today’s government numbers will also show a big gain in crude supplies, although not as large as the API.”
WTI oil for May delivery fell 50 cents, or 0.5%, to $96.69 a barrel at 9:39 a.m. on the New York Mercantile Exchange. The volume of all futures traded was 9.6% below the 100-day average.
Brent crude for May settlement declined 90 cents, or 0.8%, to $109.79 a barrel on the London-based ICE Futures Europe exchange. Trading volume was 18% above the 100-day average. Brent, the European benchmark grade, traded at a $13.10 premium to WTI, narrowing from $13.50 yesterday.
Today’s EIA report will probably show that U.S. crude stockpiles climbed to 388 million barrels last week, the highest level in more than 22 years, according to the Bloomberg survey.
The EIA report will probably show gasoline inventories dropped 1 million barrels, according to the median estimate of 12 analysts surveyed by Bloomberg. Distillate inventories are projected to fall 1.1 million barrels.
The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA, the Energy Department’s statistics unit, for its weekly survey, scheduled for release at 10:30 a.m. in Washington.
Exxon’s 96,000 barrel-a-day Pegasus pipeline line was closed after a leak was discovered in Arkansas on March 29. The line runs 940 miles (1,512 kilometers) from Patoka, Illinois, to Nederland, Texas, and serves refineries around Port Arthur and Beaumont in eastern Texas.
The U.S. Pipeline and Hazardous Materials Safety Administration issued the order yesterday, citing hazards to “life, property and the environment” if the pipeline were to continue operating without corrective measures. The line leaked 3,500 to 5,000 barrels of oil.
An explosion hit Libya’s Zueitina Oil Co.’s crude and condensate pipelines yesterday at 10 p.m., state-run National Oil Corp. said on its website, citing company official Abul Qasim Shanger. The company is investigating the incident and starting repairs, NOC said, without saying whether operations were disrupted. There were no casualties, it said.
The main rebel group in Nigeria’s oil-rich Niger River delta said it’s resuming assaults on Africa’s biggest petroleum industry after its suspected leader, Henry Okah, was imprisoned in South Africa.
The Movement for the Emancipation of the Niger Delta will start April 5 to carry out “a plague of attacks,” spokesman Jomo Gbomo said today in an e-mailed statement. “The attacks will be sustained until an unreserved apology is offered to MEND and the Nigerian government shows their willingness to dialogue.”