Oil Falls On US Inventories And China Slow Down

West Texas Intermediate fell on speculation that U.S. inventories increased for an 11th week, and as a gauge of U.S. manufacturing rose less than expected. Brent slipped.

WTI dropped as much as 1 percent. Stockpiles may have climbed 2.5 million barrels last week, according to a Bloomberg survey before a government report scheduled for release tomorrow. The Institute for Supply Management’s index reached 53.7 in March, lower than the 54 forecast in a Bloomberg survey. A separate report showed weakness in Chinese manufacturing.

“All the news is bearish today,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “The manufacturing data is not supportive and we are expecting another build in inventories.”

WTI for May delivery declined 87 cents, or 0.9 percent, to $100.71 a barrel at 10:12 a.m. on the New York Mercantile Exchange. The volume of all futures traded was 18 percent below the 100-day average. Prices dropped 1 percent in March.

Brent crude for May settlement slid 60 cents, or 0.6 percent, to $107.16 a barrel on the London-based ICE Futures Europe exchange. Volume was 25 percent below the 100-day average. The European benchmark was at a $6.45 premium to WTI after closing at $6.18 yesterday.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza