Futures dropped as much as 0.6 percent in New York, extending a 1.8 percent loss yesterday, the most in two months. Distillate inventories, including heating oil and diesel, rose last week, the Energy Information Administration reported. A decline was forecast in a Bloomberg News survey of analysts. Crude stockpiles gained for a seventh week while supplies at Cushing, Oklahoma, slid to the lowest level in two years with the opening of a new pipeline.

“The real surprise for markets was the build in distillate stocks,” Mark Pervan, the head of commodity research at Australia & New Zealand Banking Group Ltd., said in an e-mailed note today. “The build in crude stocks was once again confined to the Gulf Coast as Cushing stocks fell.”

WTI for April delivery dropped as much as 59 cents to $100.86 a barrel in electronic trading on the New York Mercantile Exchange, and was at $101.12 at 2:30 p.m. Sydney time. The contract lost $1.88 to $101.45 yesterday, the lowest settlement since Feb. 14. The volume of all futures traded was about 17 percent below the 100-day average.

Brent for April settlement was up 18 cents at $107.94 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $6.82 to WTI. The spread ended yesterday’s session at $6.31, widening for the first time in seven days.

Crude Stockpiles

WTI has slid 1.4 percent this week, poised for the first decline in eight weeks, amid speculation tension is easing between Ukraine and Russia and as U.S. crude supplies climbed to the highest level since December.

“The drop in the price has been magnified amid growing U.S. inventories and decreasing geopolitical risks,” said Hong Sung Ki, a commodities analyst at Samsung Futures Inc. in Seoul.

Distillate stockpiles increased by 1.41 million barrels in the seven days through Feb. 28, said the EIA, the Energy Department’s statistical arm. They were projected to decline by 1 million barrels, according to the median estimate of nine analysts surveyed by Bloomberg.

Stockpiles at Cushing, the nation’s largest oil-storage center and the delivery point for New York-traded contracts, slid by 2.66 million barrels to 32.1 million, the EIA reported. TransCanada Corp. began moving crude from the hub to the Texas Gulf Coast in January via the southern portion of its Keystone XL pipeline.

In Paris, the International Energy Agency said it’s “constantly monitoring” oil and gas markets amid the crisis in Ukraine and stands ready to respond if necessary. European Union leaders will consider repercussions for Russia at an emergency meeting today after Foreign Minister Sergei Lavrov fended off a U.S. effort to ease tensions in the Crimean peninsula.

To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Heesu Lee in Seoul at hlee425@bloomberg.net

To contact the editor responsible for this story: Pratish Narayanan at pnarayanan9@bloomberg.net

http://www.bloomberg.com/news/2014-03-05/wti-oil-declines-a-third-day-as-u-s-crude-stockpiles-increase.html

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