Crude dropped after the American Petroleum Institute said U.S. inventories rose to a 10-month high last week amid speculation that a slowing European economy may reduce demand.
Prices fell as much as 0.6 percent on the report that supplies rose 3.41 million barrels to 369.3 million in the week to April 13. The Energy Department may say stockpiles gained 1.8 million, a Bloomberg survey before the 10:30 a.m. release in Washington showed. Adam Posen, a Bank of England policy maker, ended support for more stimulus while bad loans surged in Spain.
“We are waiting for the DOE numbers and the big build that showed in the API number is weighing on the market,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “We still have economic concerns coming out of Europe.”
Crude for May delivery slid 33 cents, or 0.3 percent, to $103.87 a barrel at 9:47 a.m. on the New York Mercantile Exchange. Prices have risen 5.1 percent this year.
Brent for June settlement fell $1.12, or 0.9 percent, to $117.66 a barrel on the London-based ICE Futures Europe exchange.
The European benchmark contract’s premium to West Texas Intermediate for the same month narrowed to as little as $13.06 in intraday trading, the lowest level since Feb. 1. It was at $13.39 a barrel at 9:48 a.m. in New York.
An inventory increase to 367 million barrels in the Energy Department report would leave stockpiles at the highest level since the week ended June 3. The API report, released after the close of floor trading yesterday, showed the most supply since the week ended May 27.
“The market is expecting another build,” said Phil Streible, a Chicago-based commodities broker at RJO Futures. “We’ve seen inventories move higher in the last few weeks.”
Posen ended his push for further Bank of England stimulus, joining the majority of the nine-member Monetary Policy Committee in seeking no change to the 325 billion-pound ($517 billion) asset-purchase target, according to minutes of their April 4-5 meeting published today in London.
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