Oil finishes lower
Loss comes after initial support when a morning report showed fewer stockpiles than traders expected.
NEW YORK (CNNMoney.com) - Oil prices turned lower Thursday as traders digested a government report showing swelling stocks of petroleum.
U.S. crude for April delivery fell 47 cents to settle at $60.54 a barrel on the New York Mercantile Exchange.
The Energy Information Administration said crude stocks rose by 1.1 million barrels in the last week, in line with Reuters estimates. Gasoline stocks rose by 100,000 barrels and distillates declined by 1.3 million barrels. Reuters said analysts were looking for a 1.1 million barrel build in gasoline stocks and a 1 million barrel decline in distillate supplies.
Prices initially made a run at breakeven immediately following the report as gasoline stocks rose less than expected and distillate supplies dropped more than predicted.
However, petroleum stocks still remain well above average levels.
The EIA said crude and distillate stocks remain well above the upper end of the average range for this time of year, and gasoline stocks are the highest they've been since June 1999.
"I think it's the weight of the swelling inventories," said Mike Fitzpatrick, vice president of energy risk management at Fimat, in explaining oil's price reversal. "And the geopolitical stuff has cooled off a little bit, but it's just in the background."
Oil prices have fluctuated widely in the last couple of days.
Crude sold off $1.73 Wednesday as traders expected a robust build in U.S. stocks. But Tuesday saw the opposite, with oil prices rising $1.45 after militants in Nigeria, demanding more control over the country's oil wealth, blew up a pipeline and attacked a major tanker terminal over the weekend. The NYMEX was closed Monday for Presidents Day.
Some of the other geopolitical stuff Fitzpatrick was referring to include a burst of sectarian violence in Iraq and continued concern over Iran's nuclear program.
More than 100 people have been killed in Iraq since Wednesday after a Shiite mosque was blown up in an attack, and Shiites responded by bombing Sunni mosques and gunning down people.
The worst sectarian violence since the fall of Saddam Hussein pushes the oil-rich nation, already torn apart by religious and ethnic divisions, even closer to civil war.
Trouble has also brewed in South America, with protests in Ecuador disrupting production and shipments and uncertainty over how Venezuela will award future oil contracts.
And traders continue to watch Iran, which has clashed diplomatically with the West over a nuclear program it says is peaceful but many governments say is designed to produce a weapon in violation of treaties.
Markets fear the row could result in an embargo of Iranian oil, although any such action is at least a month off and not considered likely, as the Russians and Chinese are not taking as hard a line with the country.
China's appetite for African oil grows. Click here
Audi revs up diesel car race. Click here