WTI drops after large build in US inventories last week

US oil and product stockpiles jumped last week, amid a small increase in net imports and higher domestic output.

According to the Energy Information Administration, the Department of Energy's statistical arm, US oil inventories rose by 9.9m barrels (consensus: 1.485m) over the week ending on 26 April to reach 470.6m barrels, putting them at their five-year average.

Product stockpiles were mostly higher too, with those for gasoline increasing by 0.9m barrels and inventories of propane/propylene up by 1.2m barrels.

Distillate fuel inventories on the other hand fell by 1.3m barrels.

Refineries meanwhile operated at 89.2% of their capacity, versus 90.1% over the prior week.

In parallel, domestic output edged up further, rising by 100,000 b/d to 12.3m b/d.

There was also a 77,000 b/d drawdown from the strategic petroleum reserve which "points to possible concerns over higher oil prices among US officials" said Kieran Clancy at Capital Economics.

As of 1635 BST, front month West Texas Intermediate crude oil futures were down by 1.139% to $63.19 a barrel on the ICE.