Brent crude dropped for the first time in three days on concern a global supply glut will persist.
Saudi Arabia, the world’s biggest exporter, is pumping about 10 million barrels a day, close to the record output in 2013. U.S. crude stockpiles rose for an 11th week through March 20, a Bloomberg News survey showed before a report from the Energy Information Administration Wednesday.
Brent and West Texas intermediate crudes have retreated from their February peak as the Organization of Petroleum Exporting Countries pumped more oil than its target and U.S. crude output surged to the highest levels in more than 30 years. Oil gained earlier as a weaker dollar boosted the appeal of commodities priced in the U.S. currency.
“U.S. production is still rising and the Saudis are not cutting, so we are going to be in this glut for a while,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. “We don’t have any bullish news out there except for the U.S. dollar.”
Brent for May settlement slid 81 cents, or 1.4%, to $55.11 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $7.6 to WTI on the ICE.
WTI for May delivery gained 6 cents to $47.51 a barrel on the New York Mercantile Exchange.
U.S. crude inventories gained for 10 weeks to 458.5 million barrels in the week ended March 13, the highest in weekly data compiled by the Energy Department since August 1982.
