Oil slips again as US stockpiles hit 8-year high

Oil declined today as rising US crude stockpiles kept supplies at the highest level in more than eight decades.

Futures slid as much as 1.5 per cent in New York after closing little changed on Wednesday. Inventories expanded for a seventh week to 534.8 million barrels, according to a report from the Energy Information Administration. Imports and production dropped.

Ecuador and Venezuela will support a cut to output at a meeting between major exporters in Doha next month, Ecuador's Oil Minister Carlos Pareja said in a post on the ministry's Twitter account.

Oil is up about 12 per cent in March after rebounding from a 12-year low last month amid speculation the global surplus will ease as US output declines. Saudi Arabia, Russia, Qatar and Venezuela agreed in February they would cap production at January levels if other producers followed suit to tackle the oversupply.

They'll meet again with other countries in Doha on 17 April.

''The rally was overdone and the expectation is for a further moderation of prices,'' Michael McCarthy, a chief strategist at CMC Markets in Sydney, told Bloomberg. ''While the outlook is more constructive for energy markets over the next 12 months, the current supply imbalance and the huge inventories mean it's very hard to get too positive on oil prices anytime soon.''

West Texas Intermediate for May delivery fell as much as 58 cents to $37.74 a barrel on the New York Mercantile Exchange and was at $37.82 at 3:20 pm. Hong Kong time. The contract gained 4 cents to $38.32 Wednesday. Total volume traded was about 12 percent below the 100-day average. Prices are 2.1 percent higher this quarter.

Brent for May settlement, which expires Thursday, dropped as much as 48 cents, or 1.2 per cent, to $38.78 a barrel on the London-based ICE Futures Europe exchange. Prices have gained 8 percent this month and 4.2 per cent this quarter. The more-actively traded June contract fell 44 cents to $39.61. The global benchmark crude is trading at a premium of $1.05 to WTI.

US crude inventories increased by 2.3 million barrels last week, the EIA said in a report Wednesday. Supplies at Cushing, Oklahoma, the delivery point for WTI and the nation's biggest oil-storage hub, dropped by 272,000 barrels. Production slid for a third week to 9.02 million barrels a day.