Patrick T. Fallon/Bloomberg News
Oil dropped to the lowest in more than two weeks amid estimates that U.S. crude and gasoline inventories continue to climb.
Futures slipped as much as 1.9% in New York. Crude stockpiles probably rose for a fifth week while gasoline supplies approached a record, according to a Bloomberg survey before an Energy Information Administration report Feb. 7. The gasoline crack, the profit from processing oil into gasoline, fell. Statoil ASA said it would make another $1 billion of cost cuts this year, while BP said it needs to borrow money to cover spending and dividends.
Oil has fluctuated above $50 a barrel since a deal to trim output from the Organization of Petroleum Exporting Countries and 11 other nations took effect Jan. 1. While OPEC members implement pledged cuts and Russia says its own reductions are ahead of schedule, U.S. production has edged higher as drillers boosted the rig count to the most since October 2015.
“Gasoline is just getting slaughtered today, and it’s dragging crude with it,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “Gasoline breached the 200-day moving average earlier, and the crack dropped below $10 for the first time since November. A 2 million-barrel gasoline build would bring us to an all-time high, and crude inventories have been climbing, too.”
West Texas Intermediate for March delivery fell 76 cents, or 1.4%, to $52.25 a barrel at 9:43 a.m. on the New York Mercantile Exchange. Total volume traded was about 6% below the 100-day average. The contract touched $52.03, the lowest since Jan. 20.
Gasoline futures for March delivery dropped 1.7% to $1.4848 a gallon, after earlier touching $1.4802, the lowest since Dec. 1. The March gasoline crack spread, an estimate of the profit from refining crude into the fuel, climbed as much as 4.6% to $9.949 a barrel.
|By Mark Shenk
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