Oil futures plunged by more than 5% on Wednesday to post the lowest finish of the year after domestic government data showed a sudden surge in crude supplies that boosted inventories to a new record, according to Bloomberg MarketWatch.
The drop came as OPEC members touted high compliance among participants since the production curb began this year. At the CERAWeek conference in Houston on Tuesday, Secretary-General Mohammed Barkindo reported that the commitment among participating countries “remains high.”
On the New York Mercantile Exchange, April West Texas Intermediate crude fell $2.86, or 5.4%, to settle at $50.28 a barrel.
On London’s ICE Futures Exchange, May Brent crude, the global benchmark, fell $2.81, or 5%, to end trading at $53.11 a barrel.
Earlier on Wednesday, the U.S. Energy Information Administration reported an 8.2 million-barrel climb in domestic crude supplies last week, marking a weekly ninth climb in a row. Total commercial inventories were lifted to a record weekly level of 528.4 million.
Expectations for a large rise in the official data rose after the American Petroleum Institute’s report released on Tuesday revealed that domestic crude inventories rose by a whopping 11.6 million barrels in the last week. Analysts polled by S&P Global Platts had forecast an inventory increase of 1.6 million barrels.
“This report runs the gamut in terms of extremes, with a huge 8.2 million-barrel build to crude stocks tilted bearish, large draws to the products distinctly bullish,” said Matt Smith, director of commodity research at ClipperData.
Back on the New York Mercantile Exchange, April natural gas rose 7.7 cents, or 2.7%, to settle at $2.901 per million British thermal units, ahead of the commodity’s update on U.S. inventories due Thursday morning from the EIA.