New York — NYMEX April crude closed lower Thursday as growing US crude stockpiles highlighted the oil market's surplus, dragging the front-month contract further below ICE Brent.
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In the last 30 minutes before the market's close, NYMEX April crude dropped $3 to $47.99/b, before settling $2.82 lower at $48.17/b.
At 2:35 pm EST (1935 GMT), ICE April Brent was down $1.44 at $60.19/b.
In refined product action, NYMEX March ULSD closed 3.22 cents higher at $2.1358/gal. NYMEX March RBOB ended down 1.11 cents at $1.7076/gal.
Front-month NYMEX crude came under selling pressure Thursday in the aftermath of Wednesday's US crude inventory report, which showed stockpiles rising 8.4 million barrels last week, analysts said.
Stocks at Cushing, Oklahoma -- delivery point for the NYMEX futures contract -- increased 2.4 million barrels last week.
"The huge oversupply in the US, especially in the Gulf Coast and Cushing, is depressing WTI values," Energy Aspects oil analyst Dominick Haywood said.
The front-month ICE Brent-WTI spread widened to around $12/b Thursday.
That yawning gap should incentive Gulf Coast refiners to purchase domestic crude over Brent-linked imports, as long as the price differential is enough to cover the pipeline tariff, he said.
The US dollar index rose about 1% Thursday, hovering around 95.2.
A strong dollar makes greenback-denominated oil more expensive for holders of other currencies, putting downward pressure on prices.
The US consumer price index fell 0.7% in January, largest since December 2008, the Commerce Department said Thursday.
Federal Reserve Chairman Janet Yellen has said an appropriate time to raise interest rates is when inflation reaches a target of 2%, Brown Brothers Harriman analysts said in a note.
However, the central bank focuses on core inflation, which strips out volatile food and energy prices, and actually rose in January, they said.
"Today's report should help boost Fed officials' confidence of their own baseline forecast for a medium term recovery price pressures."