Supplies rose 4.72 million barrels to 350.8 million barrels last week, the Energy Department said today. Stockpiles were forecast to climb by 2.75 million barrels, according to a Bloomberg News survey. Prices for delivery in future months are higher than for earlier ones, a situation known as contango, allowing buyers to profit from hoarding oil.
Crude oil for March delivery fell $1.61, or 4.3 percent, to $35.94 a barrel at 2:48 p.m. on the New York Mercantile Exchange, the lowest settlement since Jan. 15. Oil is down 19 percent this year and 62 percent from a year ago.
The price of oil for delivery in April is $6.53 a barrel higher than for March. December futures are up $17.75 from the front month.
Crude oil inventories have gained in 18 of the past 20 weeks, leaving stockpiles 16 percent higher than the five-year average for the period, the department said.
Supplies at Cushing, Oklahoma, where oil traded on Nymex is stored, climbed 1.7 percent to 34.9 million barrels last week, the highest since at least April 2004, when the department began keeping records for the location.
Gasoline inventories fell 2.66 million barrels to 217.6 million, the biggest drop since September. A 500,000 barrel increase was forecast, according to the median of 15 analyst responses in the Bloomberg News survey.
Gasoline futures for March delivery climbed 2.59 cents, or 2.1 percent, to settle at $1.2698 a gallon in New York.
U.S. refineries operated at 81.6 percent of capacity last week, down 1.9 percentage points from the prior week, and the lowest since the period ended Oct. 3 when the Gulf Coast was recovering from hurricanes Gustav and Ike, the report showed. Analysts forecast that there would be no change.
Companies often shut refinery units for maintenance in January and February as attention shifts away from heating oil and before gasoline use rises.
The average U.S. pump price for regular gasoline rose 1.2 cents to $1.94 a gallon, AAA, the nation’s largest motorist organization, said on its Web site today. Prices have declined 53 percent from the record $4.114 a gallon reached on July 17.
The Organization of Petroleum Exporting Countries pumped 29 million barrels a day of crude oil in January, 950,000 barrels less than in December, as the 12-member group implemented previously announced supply cuts, the International Energy Agency said in its monthly report today.
The group may decide on a fourth supply reduction in six months to halt the plunge in oil prices and encourage oilfield investment when ministers gather for their next scheduled meeting March 15 in Vienna.
Brent crude oil for March settlement fell 33 cents, or 0.7 percent, to end the session at $44.28 a barrel on London’s ICE Futures Europe exchange. Brent futures were at a $8.34 premium over West Texas Intermediate, the grade that’s traded in New York.
The IEA cut its global oil-demand forecast for 2009, projecting consumption will decline by 1 million barrels a day as the global economic slowdown deepens, the biggest drop since 1982, in today’s report.
The IEA, which advises 28 developed nations on energy policy, trimmed its 2009 forecast by 570,000 barrels from last month to 84.7 million a day because of a weaker outlook from the International Monetary Fund.