Rising US oil stockpiles push market lower

New York (AFP) – Crude-oil prices slid Thursday as traders focused on rising US stockpiles amid a global supply glut.

US benchmark West Texas Intermediate (WTI) for April delivery sank $ 1.12 to close at $ 47.05 a barrel on the New York Mercantile Exchange.

In London, Brent North Sea crude for April, the global benchmark, settled at $ 57.08 a barrel, slipping 46 cents from Wednesday’s closing level.

“It’s disappointing, considering the dollar,” said Phil Flynn of Price Futures Group, noting the greenback had eased from 12-year highs hit the prior day.

A weaker dollar makes dollar-priced crude cheaper for buyers using stronger currencies, tending to support demand and, in turn, prices.

According to Flynn, the New York market was dragged down by new data on the level of crude reserves at the key Cushing terminal hub in Oklahoma.

The Genscape report published Thursday showed Cushing supplies were building again after last week’s pause, and getting closer to capacity at the key trading hub, the price settlement point for WTI.

On Wednesday the Department of Energy said US crude inventories had climbed to a fresh record high of 448.9 million barrels last week, while stockpiles at Cushing also had increased.

Flynn added that the Houston shipping channel, shut down due to an accident and fog, was “going to be up and running again, so supplies are going to be moving in again.”

A broadly weak US retail sales report for February also hung over the oil market, said Bart Melek of TD Securities.

“Ultimately markets are going to be concerned about the fact you’ll have a bit a of a slowdown of demand in the US and potentially globally,” he said.

“The risk is to the downside. The market continues to worry that inventories may hit capacity in the US and that production continues to reach record levels.”