Oil mixed as US inventories hit fresh record high

Crude oil closed solidly higher Tuesday, with the US futures contract hitting their highest point so far this year on expectations of a decline in US production (AFP Photo/Joe Raedle)

New York (AFP) - Oil prices finished mixed Wednesday after a key report showed US crude stockpiles had swollen to another record high, adding to an oversupplied global market.

The US benchmark, West Texas Intermediate (WTI) for April delivery, slipped 12 cents to $48.17 a barrel on the New York Mercantile Exchange.

Global benchmark Brent North Sea crude for April rose $1.15 to settle at $57.54 a barrel in London.

Both futures contracts had fallen sharply Tuesday, under the pressure of a stronger dollar and worries about ample global supplies.

The US government's Department of Energy reported Wednesday that US crude-oil inventories rose by 4.5 million barrels in the week to March 6 to 448.9 million, the highest level since the beginning of the weekly data series in 1982.

The increase was slightly above the consensus estimate of 4.6 million barrels, according to Bloomberg News.

Gene McGillian of Tradition Energy said the US market showed "a little resiliency" in the face of the latest storage report.

"With new records in crude stockpiles and new highs in production levels, WTI still has a pretty weak fundamental outlook, whereas Brent continues to move higher because of its sensitivity to geopolitical risks and the possibility we could see an increased demand with the ECB bond-buying program," he said.

The European Central Bank launched a massive government bond purchase program Monday, aimed at boosting growth in the sluggish 19-nation eurozone economy.

Taking a longer view, McGillian said the market was continuing to consolidate above six-year lows, which were driven by excess supplies. "We have yet to see any change in that."

The dollar continued to climb Wednesday, striking a 12-year high against the euro. A stronger US currency makes dollar-priced oil more expensive for buyers using weaker currencies, tending to curb demand.

"The strong US dollar (is) limiting any upside potential in crude oil prices," added Myrto Sokou, senior research analyst at brokerage Sucden Financial.

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