LONDON, Feb 7 — Oil fell in New York after the biggest drop in more than two weeks, on estimates that crude stockpiles continued to build up in the US.

Futures slipped 0.7 per cent after retreating 1.5 per cent yesterday. Crude supplies probably increased by 2.5 million barrels last week for a fifth weekly gain, according to a Bloomberg survey before a report tomorrow from the Energy Information Administration. Statoil ASA said it would make another US$1 billion (RM4.4 billion) of cost cuts this year after posting a surprise loss, while BP Plc said it still needs to borrow money to cover spending and dividends at current oil prices.

Oil has fluctuated above US$50 a barrel since a deal to trim output between the Organisation of Petroleum Exporting Countries (Opec) and 11 other nations took effect on January 1. While Opec members implement pledged cuts and Russia says its own reductions are ahead of schedule, US production has edged higher as drillers boosted the rig count to the most since October 2015.

“US production is starting to structurally rise again,” said Olivier Jakob, managing director at consultants Petromatrix GmbH in Zug, Switzerland. “The US will see in the second quarter a significant increase in local supply compared to a year ago.”

West Texas Intermediate for March delivery was at US$52.66 a barrel on the New York Mercantile Exchange, down 35 cents, at 1.47pm in London. Total volume traded was about 27 per cent below the 100-day average. The contract lost 82 cents to US$53.01 yesterday. Prices averaged US$52.61 last month.

US stockpiles

Brent for April settlement was 39 cents lower at US$55.33 a barrel on the London-based ICE Futures Europe exchange. The contract dropped US$1.09, or 1.9 per cent, to US$55.72 yesterday. The global benchmark traded at a premium of US$2.08 to April WTI.

Crude inventories at Cushing, Oklahoma, the delivery point for WTI and the biggest US oil-storage hub, increased by 600,000 barrels last week, according to a forecast compiled by Bloomberg. Nationwide stockpiles are at 494.8 million barrels, the highest seasonal level in more than three decades, according to weekly data compiled by the EIA since 1982.

The trading boom that cushioned the profits of Royal Dutch Shell Plc and BP through the price slump appears to be over. BP said today it made a “small” loss trading oil in the fourth quarter, while Shell last week said profits “flattened” in late 2016. These companies’ trading divisions thrived in 2015 and 2016 by taking advantage of an unusually strong contango — where contracts for future delivery trade higher than spot prices—that made it profitable to store oil.

Oil-market news

BP’s profit adjusted for one-time items and inventory changes totalled US$400 million, falling short of the US$567.7 million average estimate of analysts.  Statoil reported a fourth-quarter adjusted net loss of US$40 million, compared with an average analyst forecast for a US$618 million profit. Iraq’s semi-independent Kurds paid international oil companies for the second time in as many weeks, settling dues for crude the producers sold in November and chipping away at a backlog of payments. Singapore is considering a range of measures to lure a listing from Saudi Arabian Oil Co, according to people familiar with the matter. — Bloomberg