(MENAFN- The Peninsula) Oil futures fell sharply yesterday after government data showed the largest weekly increase in US crude inventories since 2001 and a day after Saudi Arabia reported record production in March.
US crude oil inventories surged 10.95 million barrels to a record 482.39 million in the week to April 3, the Energy Information Administration (EIA) said in its weekly report.
A Reuters survey of analysts had yielded a forecast for a build of 3.4 million barrels.
"The report is very bearish with the large crude oil inventory build and the somewhat surprising rise in gasoline inventories," said John Kilduff, partner at Again Capital LLC in New York.
Brent May crude was down $2.67 at $56.43 a barrel at 12.53pm EDT (1653 GMT), having fallen as low as $56.31.
US May crude was off $3.07 at $50.91, having fallen as low as $50.78.
Crude oil inventories at the Cushing, Oklahoma, storage hub and delivery point for the US crude contract rose 1.2 million barrels, the EIA said, and that was a much bigger jump than expected.
US crude oil imports rose 869,000 barrels per day (bpd) to 7.7 million bpd and this sign of competition from foreign producers also was cited by Kilduff and other analysts as another bearish feature of the EIA report.
Petrol inventories rose 817,000 barrels, compared with analysts' expectations for a one million barrel drop, as refiners increased capacity utilisation.
The reported build sent US RBOB gasoline futures went into sharp retreat, down 9.20 cents at $1.7689 a gallon.
The EIA data arrived a day after Saudi oil minister Ali al-Naimi said that Saudi Arabia's output would likely remain around 10 million bpd after posting a record high of 10.3 million bpd in March.
Naimi also said the kingdom stood ready to "improve" prices but only if producers outside the Organization of the Petroleum Exporting Countries (Opec) joined the effort.
Iraq and Libya also increased their output for March, further adding to Opec production, which came to about 31.5 million bpd last month, according to analyst Olivier Jakob at Swiss-based Petromatrix.
"With such a level of OPEC production it will be difficult to escape large stock-builds throughout the year," he said in a note.
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