Oil sags on inventory build, soft data
By Gene Ramos
NEW YORK (Reuters) - Crude oil futures fell on Wednesday, as U.S. crude inventories soared to their highest level in more than 20 years after rising for the sixth straight week last week and employment dipped in the United States and Europe, dimming the outlook for oil demand.
The decline reversed the previous session's gains, as the larger-than-expected crude stock build added to pressure from earlier data showing U.S. private employers hired fewer workers than expected in April, and that the euro zone's manufacturing sector declined further, causing more job losses.
Also stoking negative sentiment, new orders for U.S. factory goods posted their biggest decline in three years, though the latest data was slightly higher than expected.
Fears of further price turmoil in the oil markets followed the recent take-down of a hefty geopolitical premium after Iran agreed to return to the negotiating table with six world powers over its disputed nuclear program.
U.S. crude oil stocks rose 2.84 million barrels last week to 375.86 million barrels, more than forecast, and hitting the highest level since September 1990.
Domestic crude stocks have ballooned more than 29 million barrels since late March, the biggest six-week increase since February 2009, data from the U.S. Energy Information Administration showed. <EIA/S>
A big portion of last week's increase came from crude stored at the Cushing, Oklahoma, delivery point for U.S.-traded crude futures, which soared to a record 42.96 million barrels after adding 1.2 million barrels last week.
In refined products, gasoline stocks slid more than expected by 2 million barrels to 209.7 million, the 11th week in a row of declines. In that period, gasoline stocks have fallen 22.5 million barrels or nearly 10 percent. Continued...