Oil settles lower after large U.S. inventory build
By Samantha Sunne
NEW YORK (Reuters) - Crude oil prices pared early losses but still settled lower on Thursday after a government report showed the biggest build in U.S. crude inventory in at least 14 years.
The spread between WTI and global benchmark Brent CL-LCO10=R widened to as much as $2.53, the most since the settlement on Jan. 7, as U.S. crude tumbled more than 2 percent.
U.S. crude CLc1 closed down $1.47 at $46.31. Brent LCOc1 closed at $48.52 a barrel after falling 51 cents.
The Energy Information Administration dropped a bombshell on the markets when it announced a 10.1 million barrel build in U.S. crude inventory, the largest weekly increase in at least 14 years. [EIA/S]
"The magnitude of the build in crude came as a surprise," said Andrew Lipow, president of Lipow Oil Associates.
U.S. crude stocks are now at their highest level for the season in at least 80 years, according to EIA data. Traders had predicted a build of only 2.6 million barrels, according to a Reuters poll.
The inventory build included a 2.91-million-barrel rise at Cushing, Oklahoma, the delivery point of the U.S. crude contract.
On Thursday, the March 2016 CLc13 oil contract was trading at a premium of $8.62 a barrel to front month March 2015 CLc1, an increase of $1 from the previous day. The deepening of the contango was the largest one-day increase since the end of November. Continued...