Oil mixed as US inventories hit fresh record high

Oil prices finished mixed on Mar 11 after a key report showed US crude stockpiles had swollen to another record high, adding to an oversupplied global market. (File photo: AFP/Andy Buchanan)

NEW YORK: Oil prices finished mixed on Wednesday (Mar 11) after a key report showed US crude stockpiles had swollen to another record high, adding to an oversupplied global market.

The US benchmark, West Texas Intermediate (WTI) for April delivery, slipped 12 cents to US$48.17 a barrel on the New York Mercantile Exchange. Global benchmark Brent North Sea crude for April rose US$1.15 to settle at US$57.54 a barrel in London.

Both futures contracts had fallen sharply on Tuesday, under the pressure of a stronger dollar and worries about ample global supplies.

The US government's Department of Energy reported on Wednesday that US crude-oil inventories rose by 4.5 million barrels in the week to Mar 6 to 448.9 million, the highest level since the beginning of the weekly data series in 1982. The increase was slightly above the consensus estimate of 4.6 million barrels, according to Bloomberg News.

Gene McGillian of Tradition Energy said the US market showed "a little resiliency" in the face of the latest storage report.

"With new records in crude stockpiles and new highs in production levels, WTI still has a pretty weak fundamental outlook, whereas Brent continues to move higher because of its sensitivity to geopolitical risks and the possibility we could see an increased demand with the ECB bond-buying programme," he said.

The European Central Bank launched a massive government bond purchase programme on Monday, aimed at boosting growth in the sluggish 19-nation eurozone economy.

Taking a longer view, McGillian said the market was continuing to consolidate above six-year lows, which were driven by excess supplies. "We have yet to see any change in that."

The dollar continued to climb Wednesday, striking a 12-year high against the euro. A stronger US currency makes dollar-priced oil more expensive for buyers using weaker currencies, tending to curb demand.

"The strong US dollar (is) limiting any upside potential in crude oil prices," added Myrto Sokou, senior research analyst at brokerage Sucden Financial.