LONDON – Oil prices slipped below $63 Wednesday, deepening the previous day's 3 percent losses, after a larger-than-expected build in U.S. gasoline stocks.
Weekly U.S. government inventory data showed gasoline stocks rose 4.3 million barrels last week, more than twice the size of the rise forecast by analysts.
The build increased the U.S. supply cushion ahead of the spring refinery maintenance season, which is expected to be deeper than normal as companies prepare for new greener fuel regulations coming on line this year.
U.S. crude and distillate stocks each fell 300,000 barrels, according to the Energy Information Administration.
"It's easy to analyze this one because there is only one number to talk about. That gasoline build was just huge again," said Jim Ritterbusch, president of Ritterbusch & Associates.
Oil has fallen in five of the last six sessions as fund managers take profits, echoing their flight from gold, which posted its biggest one-day decline in nearly 13 years in New York on Tuesday.
"All commodities have had a very, very strong run. A lot of people were waiting for some kind of correction," said Mark Mathias, managing director at Dawnay Day Quantum hedge fund. "In the long term there is still an upward trend."
Investors have taken profits from a January rally that was built on concerns of supply disruptions in either Iran or Nigeria.
But OPEC President Edmund Daukoru Tuesday said he saw a "genuine downward trend" in the oil price, which was settling in a range acceptable to both producers and consumers.
He said that with current market conditions, OPEC is unlikely to change output levels when it meets on March 8.
Oil found some support from continued concern of any possible future disruption to Iranian exports as a crisis over the Islamic state's nuclear ambitions rumbles on. Sanctions are possible if the U.N. concludes Tehran wants an atomic bomb rather than simply nuclear electricity.
British Prime Minister Tony Blair said Tuesday that fears of a spike in the oil price should not stop the international community from imposing sanctions on the world's fourth-biggest oil exporter if required.
"Iran continues to weigh but there is a sense that it's a longer-term situation," said Andrew Harrington, resources analyst at ANZ Bank in Sydney. "I don't see any rash decisions about sanctions, embargoes or cuts in supply."