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US crude takes a beating, ends near $98 after inventories, SPR

A gas flare is seen at an oil well site outside Williston, North Dakota.
Getty Images
A gas flare is seen at an oil well site outside Williston, North Dakota.

U.S. crude oil fell by more than 2 percent on Wednesday, its biggest drop in two months, after the United States announced unexpected plans for a "test" release of strategic oil reserves while weekly data showed a big rise in crude stockpiles.

European benchmark Brent prices slipped modestly, widening the closely watched Brent/WTI spread for a third day, but the main focus was on the U.S. contract after a double dose of bearish supply news.

The U.S. Department of Energy surprised markets by announcing plans to sell up to 5 million barrels of crude oil from the Strategic Petroleum Reserves (SPR) to test the capabilities of the nation's emergency stockpile.

U.S. Energy Information Administration (EIA) data showed overall crude stocks in the world's largest oil consumer rose by 6.2 million barrels in the week to March 7, nearly triple expectations, as more refiners shut for seasonal work at the peak of the spring maintenance season.

Brent crude fell as well, though not by as much, with support from geopolitical risk in Libya and signs the European Union may impose tougher sanctions on Russia.

U.S. oil fell by $2.04 to settle at $97.99 per barrel, below its 50-day moving average of $98.32. Brent crude fell 40 cents to around $108 per barrel.


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