Oil price falls on supplies rise, Russia sanctions
The price of oil fell to near $100 a barrel on Wednesday as a report showed an increase in U.S. crude stockpiles and investors shrugged off the impact of new sanctions on Russia.
By early afternoon in Europe, benchmark U.S. crude for June delivery was down 97 cents to $100.31 a barrel on the New York Mercantile Exchange. On Tuesday, the Nymex contract rose 44 cents to close at $101.28.
Brent crude, an international oil benchmark, was down 61 cents to $108.37 on the ICE Futures exchange in London.
A rise in supplies suggested demand is not as strong as expected. The American Petroleum Institute said late Tuesday that U.S. stockpiles of crude oil expanded by 3 million barrels last week, while a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos., had been expecting a rise of 2.1 million barrels. Data from the Energy Department’s Energy Information Administration — the market benchmark — will be out later Wednesday.
If the API figures are confirmed by the Energy Department, “this would see U.S. crude oil stocks climbing above the 400 million barrel threshold for the first time,” said analysts at Commerzbank in Frankfurt in a note to clients.
Rising oil exports by Libya, though still far from earlier levels near 1.4 million barrels a day, also contributed to the drop in prices. Analysts cited information from Libya’s National Oil Corporation showing current exports at 285,000 barrels a day, up from 230,000 barrels a day in the first half of April.
The market was also weighed by views that new sanctions by Washington and the European Union on a group of Russian officials, executives and companies were not as severe as feared, with no public companies or major sectors of the economies affected.
In other energy futures trading on Nymex:
— Wholesale gasoline lost 2.14 cents to $2.9866 a gallon.
— Heating oil shed 2.04 cent to $2.9431 a gallon.
— Natural gas retreated 4 cents to $4.791 per 1,000 cubic feet.