Stocks follow oil lower on reserve talks

Wed Mar 28, 2012 4:30pm EDT
 
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By Rodrigo Campos

NEW YORK (Reuters) - Oil prices fell on Wednesday as the U.S. and some European governments mulled the release of strategic oil reserves, while commodity-related shares weighed on global equities.

U.S. stocks closed weaker, though far from the day's lows, in the wake of economic data that was slightly below expectations.

France, the United States and Britain are in talks about the possible release of strategic oil stocks to help push fuel prices lower, French ministers said, only weeks ahead of the country's presidential election. Purchasing power is among voters' top concerns.

Further pressuring prices, U.S. crude oil inventories posted the largest weekly build since July 2010, according to data from the U.S. Energy Information Administration.

Brent crude, up more than 15 percent this quarter, settled 1.1 percent lower at $124.16 per barrel, while U.S. crude futures settled down 1.8 percent at $105.41. U.S. crude is up about 6 percent so far this year.

The S&P 500 retreated from 4-year highs posted earlier this week but managed to hold the 1,400 level. U.S. and European equity benchmarks are still on track to post their best first quarter in 14 years.

"Investor anxiety has been rising due to the prolonged and significant rally, and we had a catalyst event in the collapse of energy stocks," said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis.

"It's a combination of investor jitters, given how far the rally has come, and technical levels that we are testing."   Continued...

 
A man refuels his car as gas prices are reflected into the windows of the United Oil gas station in Los Angeles, California March 24, 2012. REUTERS/Bret Hartman