By Nicole Friedman
NEW YORK--Oil futures slipped to two-week intraday lows, then
pared their losses, as government data showed domestic crude-oil
supplies at an all-time high.
Light, sweet crude for June delivery recently traded down 2
cents at $101.73 a barrel. Brent crude on ICE Futures Europe fell
24 cents, or 0.2%, to $109.03 a barrel.
Crude-oil stockpiles rose by 3.5 million barrels to 397.7
million barrels, the U.S. Energy Information Administration said
Wednesday. Analysts surveyed by The Wall Street Journal expected a
2.4 million-barrel increase.
Supplies now stand above the high set in May 2013, according to
EIA data going back to August 1982.
Prices fell as low as $101.31 a barrel on the news before
retracing their losses. Expectations for a supply build had already
prompted traders to sell ahead of the report's release, said Gene
McGillian, analyst and broker for Tradition Energy in Stamford,
Conn. Futures tumbled 2.2% Tuesday to the lowest settlement price
since April 7.
"Part of yesterday's selloff was predicated on the rise in
stockpiles," Mr. McGillian said. "Today's increase has been largely
priced in, and now we're going to step back."
Refining capacity utilization rose 2.2 percentage points to 91%
of capacity. Analysts had expected the operating rate to rise by
0.3 percentage point in the week.
In the Gulf Coast region, refinery utilization rose 4.2 points
to 94.1% of capacity, indicating strong demand for petroleum
products.
However, Gulf Coast supplies still rose to 209.6 million
barrels, a new high for the region. Gulf Coast supplies have
climbed in recent months since a pipeline opened in January to
connect a storage hub in Cushing, Okla., with the Gulf Coast.
The pipeline has also drained supplies out of Cushing, where
storage levels stand at the lowest since 2009. Cushing serves as
the physical delivery point for the Nymex contract, so falling
supplies at Cushing have supported U.S. oil-futures prices in
recent weeks.
"People who are focused exclusively on Cushing are focused on an
island that's surrounded by a lake of crude," said Richard
Soultanian, co-president of NUS Consulting Group in Park Ridge,
N.J. "The Gulf is now drowning in crude."
Gasoline stockpiles fell less than expected, down 274,000
barrels to 210 million barrels, the EIA said in its weekly report.
Analysts surveyed by The Wall Street Journal expected a 1.4
million-barrel decrease.
Front-month May reformulated gasoline blendstock, or RBOB,
recently traded down 1.81 cents, or 0.6%, to $3.0771 a gallon.
Distillate stocks, which include heating oil and diesel fuel,
grew by 597,000 barrels to 112.5 million barrels, compared with
analysts' forecast of a drop of 300,000 barrels.
May diesel fell 1.67 cents, or 0.6%, to $2.8959 a gallon.
Write to Nicole Friedman at nicole.friedman@wsj.com