Brent Crude Ends at $111 on US Inventory Data
Brent crude and U.S. oil settled lower on Wednesday after U.S. government data showed domestic crude inventories rose much more than forecast.
U.S. crude oil stocks increased by 3.83 million barrels in the week to March 1, the Energy Information Administration said in its weekly report. Analysts had forecast a 500,000-barrel crude build.
U.S. distillate stocks fell more than expected as refinery utilisation rates posted a surprise drop, according to EIA data
"This is all definitely putting some pressure on (crude oil) in the short term," said Phil Flynn, analyst at The Price Futures Group in Chicago. "The refinery runs right now are down and the build in inventories is rising."
"The crude market hasn't bottomed yet. There's still pressure on the downside. If you're looking for the bottom, some patience is needed, look for some more volatility still."
Brent crude futures used to price many kinds of oil imported by U.S. refineries, fell 55 cents to end at $111.06 a barrel on the ICE Futures exchange in London. U.S. light, sweet crude settled 39 cents lower at $90.43 a barrel.
"A mildly bearish weekly U.S. fuel inventory report (has) added some pressure to crude prices following a larger-than-expected crude build," said Andrey Kryuchenkov, analyst at VTB Capital.
"Some refineries came out of maintenance in the week before. Due to decent product demand and favorable cracks now we are back at low runs with the seasonal trend restored," he added.
The U.S. inventory data offset bullish macro-economic statistics, including data from a payroll processor which showed private sector employment increased more than expected.
Increased signs of a strengthening U.S. economy and continued support from the Federal Reserve pushed European stock indices to their highest level since the 2008 financial crisis on Wednesday.
Private employers added more jobs than expected in February, according to a report from a payrolls processor, boosting hopes that the beleaguered labor market was healing.
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The oil market also watched developments in Venezuela, following the death of President Hugo Chavez after a two-year battle with cancer.
Investors were on the lookout for a succession plan in the OPEC nation. The country's oil industry was operating normally and no disruption was expected, state oil company PDVSA said.
"His death is not likely to have any major impact on the oil market," Tetsu Emori of Astmax Investments said. "But investors are waiting and watching."