Crude oil futures fell Wednesday, hit by a surprise build in US oil inventories and the renewed potential for a strategic oil reserve release.
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Light, sweet crude oil for May delivery settled $1.92, or 1.8 percent, lower at $105.41 a barrel on the New York Mercantile Exchange, after dipping below $105 a barrel earlier in the session. Brent crude oil on the ICE futures exchange was $1.10 lower at $124.16 a barrel.
Crude oil prices, which fell throughout the session Wednesday, slumped after the Energy Information Administration reported that US oil stockpiles rose by 7.1 million barrels last week to a seven-month high. Analysts had expected a more modest 2.2 million-barrel increase.
The larger-than-expected build combined with new reports of potential strategic oil releases on comments made by a French official raised the specter of increasing global oil supplies, said Phil Flynn, an energy analyst with PFGBest.
"It was a little bit here, a little bit there, a little bit of everything today," he said.
Earlier Wednesday, French government spokesman Valerie Pecresse said the country is working "alongside the US and the UK in the consultation with the IEA [International Energy Agency], which could allow reserves to be used."
The statements follow pledges earlier this month from US and UK leaders that they will keep open discussion about an oil release. But last week, the IEA's executive director said the agency hadn't discussed plans for a release with its members.
"It's looking more and more like they are going to go ahead and do it," said Carl Larry, head of trading adviser Oil Outlooks and Opinions.
A release of oil from strategic stockpiles would bring futures prices back to near $100, Larry said, though he said he doubted a release will have much of a long-term impact
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