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West Texas Intermediate oil maintained losses after a government report showed that U.S. crude inventories unexpectedly dropped.
Futures slid as much as 0.9 percent in New York. Supplies decreased 2.38 million barrels to 380.1 million last week, according to the Energy Information Administration. U.S. crude stockpiles were projected to climb 2.5 million barrels, according to the median of analyst responses in a Bloomberg survey. The Houston Ship Channel, home to the nations’s largest petrochemical complex and export port, reopened March 26 after an oil spill shut it for four days.
U.S. crude production increased 2,000 barrels a day to 8.19 million, the EIA said. Output has surged to the highest level since 1988 this year as a combination of horizontal drilling and hydraulic fracturing, or fracking, which has unlocked supplies trapped in shale formations.
Crude supplies at Cushing, Oklahoma, the delivery point for WTI, decreased 1.22 million barrels to a four-year low of 27.3 million, the report showed. Stockpiles at the hub have fallen since the southern portion of the Keystone XL pipeline began moving oil to the Texas Gulf Coast from Cushing in January.
Refineries operated at 87.7 percent of capacity in the seven days ended March 28, up 1.7 percentage points from the prior week, according to the EIA, the Energy Department’s statistical arm.
WTI for May delivery decreased 63 cents, or 0.6 percent, to $99.11 a barrel at 10:46 a.m. on the New York Mercantile Exchange. The contract traded at $99.23 before the release of the report at 10:30 a.m. in Washington. The volume of all futures traded was 6.1 percent above the 100-day average for the time of day.
Brent for May settlement fell $1.32, or 1.3 percent, to $104.30 a barrel on the London-based ICE Futures Europe exchange. Futures touched $104.12, the lowest level since Nov. 8. Volume was 83 percent above the 100-day average. The European benchmark grade traded at a $5.19 premium to WTI. The spread shrank to the narrowest level since October.
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