Oil Futures Sag on Record-High Inventories

By Nicole FriedmanDow Jones Newswires

NEW YORK--Oil futures fell Thursday for a second straight day on concerns that record-high U.S. supplies would overwhelm the capacity of refineries to process oil.

Light, sweet crude for June delivery settled down 32 cents, or 0.3%, at $99.42 a barrel on the New York Mercantile Exchange, the lowest settlement price since March 25. Brent crude on the ICE futures exchange fell 31 cents, or 0.3%, to $107.76 a barrel, the lowest settlement since April 11.

Continue Reading Below

U.S. crude-oil supplies stood at 399.4 million barrels as of April 25, according to the U.S. Energy Information Administration.

That was the highest since the EIA began keeping track of weekly storage levels in 1982. According to monthly data going back to 1920, supplies are at their highest since 1931.

Stockpiles have grown amid booming oil production and reduced demand while refineries undergo seasonal maintenance.

"There's plenty of oil around," said Jeffrey Grossman, president of BRG Brokerage in New York. "This market is working its way lower. It's on its way to $95 by mid-year, probably."

Prices fell as low as $98.74 a barrel in early trading before bouncing higher as traders who had bet on lower prices locked in their profits.

Some market watchers, still concerned that ongoing tensions between Russia and the West could lead to sanctions that crimp Russian oil exports, expected that prices couldn't fall much lower and decided to cash out their gains, said Gene McGillian, analyst and broker at Tradition Energy in Stamford, Conn.

Front-month June reformulated gasoline blendstock, or RBOB, settled down 2.56 cents, or 0.9%, to $2.9388 a gallon, the lowest settlement since April 7. June diesel fell 1.41 cents, or 0.5%, to $2.9140 a gallon, the lowest settlement since April 7.