West Texas Intermediate oil fell to a six-week low after U.S. crude inventories extended a record high. Brent declined on signs of a Chinese economic slowdown.
Futures slipped as much as 1 percent in New York. Crude stockpiles gained 1.7 million barrels last week to 399.4 million, the most since the Energy Information Administration began reporting weekly data in 1982. China’s manufacturing grew less than economists estimated in April, a report today showed. WTI surged to a five-month high on March 3 on tension between Russia and Ukraine.
“It’s hard to be bullish with oil supplies near records,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “Barring a disruption of supply or a major ratcheting up of tension in Ukraine, we could see a dramatic drop in oil prices. Crude, gasoline and diesel have probably peaked for a long time.”
WTI for June delivery dropped 54 cents, or 0.5 percent, to $99.20 a barrel at 9:32 a.m. on the New York Mercantile Exchange. Futures touched $98.74, the lowest level since March 21. WTI slipped 1.8 percent in April, the biggest monthly decline since November. The volume of all futures traded was about 36 percent above the 100-day average for the time of day.
Brent for June settlement declined 92 cents, or 0.9 percent, to $107.15 a barrel on the London-based ICE Futures Europe exchange. Volume was 7.2 percent lower than the 100-day average. The European benchmark crude traded at a $7.95 premium to WTI, down from $8.33 at yesterday’s close.