American crude supplies climbed 9.53 million barrels to 518.1 million, the highest level in weekly data going back to 1982 and more than twice the 3.5 million-barrel gain forecast by analysts surveyed by Bloomberg before a government report Wednesday.
Gasoline stockpiles also rose to a record, while refinery oil demand slipped as seasonal maintenance was performed. Saudi Arabia told OPEC that it cut output last month by the most in eight years, more than it pledged under a deal to curb supply, the group’s monthly market report on Monday showed.
Oil has traded above $50 a barrel since the OPEC and 11 other countries started trimming supply on January 1. OPEC’s secondary source estimates indicate that the 11 members subject to the accord are achieving more than 90 per cent of the agreed cuts. The price gains are funding a revival in US shale drilling that’s countering the efforts of OPEC and its biggest producer Saudi Arabia.
“We would expect crude inventories in the US to increase for about four-more weeks before starting to drop,” Matt Sallee, who helps manage $17.1 billion in oil-related assets at Tortoise Capital Advisors in Leawood, Kansas. “The middle of March is when we expect inventories to turn lower here as the OPEC cuts are felt and refineries come back.”
West Texas Intermediate for March delivery slipped 9 cents to settle at $53.11 a barrel on the New York Mercantile Exchange. Total volume traded was about 8 per cent below the 100-day average.