Oil Prices

[BlueKelah]

Oil drops nearly 9% to end below $50 a barrel

SAN FRANCISCO (MarketWatch) — U.S. crude-oil futures marked their first decline in five sessions on Wednesday, plunging by almost 9% to settle below the $50 mark as the nation’s stockpiles climbed more than expected.

West Texas Intermediate crude for March delivery CLH5, +0.43% slid $4.60, or 8.7%, to settle at $48.45 a barrel on the New York Mercantile Exchange. Oil was trading around $50.90 before the supply data were released.

The retreat took a bite out of the contract’s nearly 20% rebound that had begun on Thursday on hope that a cut in U.S. production would whittle down crude stockpiles.

But such hopes were dampened, at least for the short term. On Wednesday, the U.S. Energy Information Administration said crude stockpiles rose 6.3 million barrels for the week ended Jan. 30. Analysts polled by Platts forecast a climb of 2.8 million barrels.

“Crude stocks have now built by 30 million barrels in the last four weeks, and will continue to through the first quarter — as is the seasonal trend,” said Matt Smith, commodity analyst at Schneider Electric.

American Petroleum Institute data released after the Nymex close on Tuesday showed weekly inventories rising by 6.1 million barrels.