Oil Drops After Strong Inventories Despite Iraq

West Texas Intermediate crude erased gains after a government report showed that U.S. supplies rose at Cushing, Oklahoma. Brent traded above $113 as Islamist militants fought Iraq’s government for control of the nation’s largest refinery.

Crude stockpiles rose 247,000 barrels to 21.4 million last week at Cushing, the delivery point for New York Mercantile Exchange futures, Energy Information Administration data showed. Total stockpiles fell 579,000 barrels, less than the 750,000-barrel inventory drop was projected by analysts surveyed by Bloomberg. The Baiji refinery in northern Iraq was damaged as a battle raged over control of the plant.

WTI for July delivery fell 19 cents to $106.17 a barrel at 10:37 a.m. on the New York Mercantile Exchange. Futures traded at $106.63 before the release of the report at 10:30 a.m. in Washington. The contract touched $107.68 on June 13, the highest level since Sept. 19. The volume of all futures traded was 24 percent above the 100-day average.

Brent for August settlement increased 1 cent to $113.46 a barrel on the London-based ICE Futures Europe exchange. Volumes were little changed from the 100-day average. The European benchmark crude was trading at a $7.74 premium to the August WTI contract versus $7.58 yesterday.

U.S. crude stockpiles rose to 399.4 million barrels in the week ended April 25, the most since the EIA began publishing weekly data in 1982.

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