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. 

Gold fell to a minimum of four weeks as investors transfer funds to riskier assets on a wave of optimism about the U.S. economy.

Last month, negotiations regarding assistance to Cyprus attracted the gold market buyers, who saw in this metal safe-haven asset that can protect their money from the uncertainty surrounding the future of the eurozone. Gold prices have exceeded $ 1,600, but this growth was unsustainable, after last week Cypriot banks have resumed their work in a fairly quiet environment. During 2013, gold futures lost 6% in value.

The economic situation in the U.S. has stabilized and stock indices surged to new highs, attracting investors to the promise of higher returns.

On Monday, it became known that manufacturing activity in the United States and China in the past month rose less sharply than economists expected. The data released on Tuesday, showed the continued decline in manufacturing activity in the euro area in March. Volume in U.S. factory orders rose in February by 3 percent, slightly above expectations.

Released on Wednesday, U.S. data on the employment rate and activity in the non-manufacturing sector was weaker than the market expectations, but investors are still prone to selling gold.

Dealers say the physical market buying from jewelers in Indonesia, but buyers in other countries, are projected to wait for further price reductions. Premium for gold bars in Singapore is $ 1.20 an ounce to the spot price in London.

Investors are waiting for coming in Friday's employment report in the U.S., which could support the view of the market that the Fed will keep policy extremely loose. Gold rose to a 11-month high in October of last year, when the Fed announced the third phase of "quantitative easing."

The cost of the June gold futures on COMEX today dropped to 1563.1 dollars per ounce.

Change % Change Last

GOLD 1,576.30 -24.60 -1.54%

OIL 97.19 0.12 0.12%