Oil falls on high US inventory; unrest supports Brent
Obama says US to reduce oil imports by 1/3 in 10 years
LONDON: Oil fell on Wednesday, weighed down by swelling crude inventories in the United States, while President Barack Obama was expected to set an ambitious long-term goal to cut oil imports.
Crude oil stocks at Cushing in Oklahoma, the delivery point of US crude, rose to a record high, dragging US futures prices lower by more than $1 at one point.
By 1501 GMT, US crude slipped by 71 cents to $104.08 a barrel while North Sea Brent crude fell 9 cents to $115.07 a barrel.
Domestic crude stocks rose 2.95 million barrels in the week to March 25, the report showed, well above expectations for a 1.8 million barrel build.
Crude oil stored at the NYMEX Cushing, Oklahoma, delivery hub rose 1.69 million barrel to record high of 41.89 million barrels.
fell more than expected, but analysts attributed a part of the fall to exports.
Ahead of the weekly oil data, US crude nearly pared losses and Brent turned positive as US ADP employment data showed the private sector added 201,000 jobs in March.
While the high stocks at land-locked Cushing provided some buffer to US crude from international geo-political risks the civil unrest in North Africa and the Middle East limited losses in Brent crude prices.
In Libya, rebels pulled out of the oil town of Ras Lanuf on Wednesday under heavy bombardment from Muammar Gaddafi's forces, showing their weakness without Western air strikes to tip the scales in their favour. A conference of 40 governments and international bodies on Tuesday agreed to press on with a NATO-led aerial bombardment of Libyan forces until Gaddafi complies with a UN resolution to end violence against civilians.
In the long term, US President Obama will outline a strategy to cut oil imports by a third over 10 years, focusing on energy security at a time high gasoline prices could stall US economic recovery.
The White House says this is a deliberate turn toward energy security by Obama and will be followed by other events to highlight his strategy. But the immediate market reaction was limited.
"It sounds like a very ambitious target indeed," said Carsten Fritsch, analyst at Commerzbank.
"It will be difficult to achieve. Perhaps there will be large energy, fuel saving measures or they would need to allow more oil drilling, but after the Gulf of Mexico (spill) it could be difficult." -Reuters
NEW YORK: Traders of crude oil and natural gas react during early trading at the New York
Mercantile Exchange. -Agencies