Crude ends lower as inventories rise

Wed Apr 4, 2012 4:15pm EDT
 
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NEW YORK (Reuters) - Crude futures fell a second straight session on Wednesday, dropping more than 2 percent after a government report showed crude oil inventories last week rose much more sharply than expected in the United States.

Concerns about downside risks to the euro zone economic outlook expressed by European Central Bank President Mario Draghi pressured the euro to its lowest level against the dollar in three weeks, adding to the pressure on oil.

A stronger dollar can pressure dollar-denominated oil by making it more expensive for consumers using other currencies.

Wednesday's push lower came after the previous day's losses on indications from the U.S. Federal Reserve that the central bank was less inclined to implement any more monetary stimulus.

Rising domestic production and imports pushed up U.S. crude oil inventories by 9.01 million barrels last week, the Energy Information Administration said in its weekly report.

The inventory rise put stocks at their highest since June 2011 and 4.7 million barrels above the year-ago period.

Distillate stocks rose slightly, by 19,000 barrels, while gasoline stocks fell 1.46 million barrels, the EIA said.

U.S. oil inventories, crude oil stocks were expected to have risen last week by 2.2 million barrels, a Reuters poll of analysts taken ahead of weekly stocks reports showed.

Gasoline stockpiles were expected to be down 1.4 million barrels and distillate stocks were estimated to be down 400,000 barrels, the survey showed.   Continued...

 
A driver pumps petrol into his car at a petrol station in Brussels March 8, 2011. REUTERS/Yves Herman