Supplies of crude oil rose 6.1 million barrels to 332.7 million last week, the highest since August 2007, an Energy Department report showed today. Stockpiles were forecast to climb by 1.4 million barrels, according to a Bloomberg News survey. Refineries reduced operating rates, or runs, by 2 percentage points as fuel consumption tumbled.
Crude oil for March delivery fell 3 cents to $43.52 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Prices are down 2.4 percent so far this year and are 52 percent lower than a year ago.
Gasoline futures for February delivery dropped 8.6 cents to $1.0878 a gallon in New York.
U.S. fuel consumption during the four weeks ended Jan. 16 averaged 19.4 million barrels a day, down 4.7 percent from a year earlier, the Energy Department report showed.
Supplies at Cushing, Oklahoma, where oil traded on Nymex is stored, climbed 0.7 percent to 33.2 million barrels last week, the highest since at least April 2004, when the department began keeping records for the location.
Stockpiles in the Mid-Continent, known as PADD 2, increased 1.7 percent to 82.2 million barrels, the highest since the week ended June 26, 1998, when oil was trading at about $14 a barrel. Oklahoma is in PADD 2.
The price of oil for delivery in April is $2.09 higher than for March, up from a $2 premium yesterday. December futures are up $10.14 from the front month, versus $10.09 yesterday. This structure, in which the subsequent month’s price is higher than the one before it, is known as contango.
Companies including Citigroup Inc.’s Phibro LLC, Royal Dutch Shell Plc and BP Plc have stored oil on tankers as the so-called contango, a market where buyers pay more for supplies later in the year than now, allows them to profit from hoarding crude.
Refineries operated at 83.3 percent of capacity last week, the report showed, the lowest for the week since 1991. Analysts forecast that there would be a 0.5 percentage point drop.
Gasoline inventories increased 6.48 million barrels to 220 million, the department said. Stockpiles were forecast to rise by 1.8 million barrels, according to the median of 15 responses from analysts in the survey.
Regular gasoline at the pump, averaged nationwide, increased 0.2 cent to $1.85 a gallon, AAA, the largest U.S. motorist organization, said on its Web site today. Prices have declined 55 percent from the record $4.114 a gallon reached on July 17.
Distillate supplies, which include heating oil and diesel, rose 790,000 barrels to 145 million barrels. Stockpiles were forecast to climb by 500,000 barrels.
Heating oil for February fell 3.8 cents, or 2.7 percent, to $1.348 a gallon in New York.
Saudi Arabia, the world’s top oil exporter, decided to cut production by 300,000 barrels a day below its OPEC quota to prop up prices, Algerian Oil Minister Chakib Khelil told the state-run newspaper El Moudjahid. The desert kingdom will make the reduction before a March 15 meeting of the Organization of Petroleum Exporting Countries.
New production targets for OPEC members came into effect Jan. 1 following a Dec. 17 meeting in Oran, Algeria. The 12- member group needs to make the deepest supply cuts in its history to comply with the revised quotas.
The 11 OPEC nations subject to output limits pumped a combined average of 27.45 million barrels a day last month, according to Bloomberg estimates. That’s 2.6 million barrels more than the 24.845 million-barrel-a-day ceiling. Iraq is the only member exempt from quotas.
Brent crude oil for March settlement rose 13 cents, or 0.3 percent, to $45.15 a barrel on London’s ICE Futures Europe exchange.