Crude
extended declines after a government report showed that U.S. oil
stockpiles climbed to the highest level in more than 22 years. West Texas
Intermediate’s discount to Brent narrowed for a second day.
Futures in New York fell as much
1.8 percent as the Energy Information Administration said supplies rose 2.71
million barrels to 388.6 million last week, the highest level since 1990. The
report was projected to show an advance of 2.05 million, according to a survey.
Crude
production was unchanged near the highest level since 1992. Output has surged
as the combination of horizontal drilling and hydraulic fracturing, or
fracking, has unlocked supplies trapped in shale formations in states including
North Dakota, Texas
and Oklahoma.
Crude
stockpiles at the U.S.
storage hub in Cushing, Oklahoma, fell 287,000 barrels to 49.2
million last week, according to the EIA, the statistical arm of the Energy
Department. Supplies at the hub rose to a record 51.9 million in the week ended
Jan. 11.
Gasoline
stockpiles decreased by 572,000 barrels to 220.7 million last week, according
to the EIA. Supplies of distillate fuel, a category that includes heating oil
and diesel, declined 2.27 million barrels to 113 million.
Exxon Mobil
Corp. (XOM)’s Pegasus pipeline, linking the U.S. Midwest to Texas refineries, will remain shut until
regulators are satisfied with repairs. 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 from Patoka, Illinois, to Nederland, Texas, and
serves refineries on the Gulf
Coast.
WTI oil for
May delivery fell to $95.10 a barrel on the New York Mercantile Exchange. The
contract traded at $96.46 before the release of the report at 10:30 a.m. in Washington.
Brent crude
for May settlement declined $1.93, or 1.7 percent, to $108.76 a barrel on the
London-based ICE Futures Europe exchange.
