NEW YORK, March 23: US crude oil futures fell further at midday, dropping below $54 in a sell-off triggered by government data showing US crude stocks rose last week to their highest level in nearly three years. Gasoline and heating oil futures also fell hard despite stock draws last week, swayed by crude’s deep dive that has taken the market further away from the prompt-month record of $57.60 struck just last Thursday.
At 1730 GMT crude for May delivery traded at $53.65, down $2.38, or 4.2 per cent, after falling as low as $53.40 earlier, the lowest since March 11, on the New York Mercantile Exchange. In the early going, it rose as high as $55.30.
In London, Brent crude extended losses, trading $1.59, or 2.9 per cent, lower at $53 a barrel on the International Petroleum Exchange.
The US Energy Information Administration said domestic crude stocks rose 4.1 million barrels to 309.3 million barrels, the highest since July 26, 2002. The increase, the sixth in as many weeks, was more than twice the expected 2.0 million barrel rise in a Reuters survey of analysts.
“The drop in refinery utilization and the rise in imports are the causes behind the big rise in crude stocks. Refineries had to give up runs due to seasonal maintenance,” said Phil Flynn, analyst at Alaron Trading in Chicago.
Gasoline stocks dropped 4.1 million barrels to 217 million barrels in the week to March 18, the EIA said.
That was the lowest since Feb. 4 and more than three times the 1.2 million barrel average drawdown analysts had forecast in the survey. It was the third consecutive weekly draw.
Gasoline demand was steady at 9.069 million barrels per day versus 9.131 million bpd the previous week.
“The draw in gasoline means demand is still strong and consumers are taking the high pump prices of gasoline in stride,” said Flynn.
The EIA data also showed distillate stocks fell 2.8 million barrels to 104.5 million barrels, the ninth straight week of a drawdown, sparked by a late blast of wintry chill in the US Northeast, the biggest heating oil market in the world.
NYMEX April gasoline was down 2.79 cents, or 1.8 per cent, at $1.5470 a gallon, after dropping as low at $1.5350. It peaked early at $1.5850.—Reuters
