West Texas Intermediate oil pared gains after a government report showed that U.S. fuel stockpiles surged. Brent earlier slipped below $50 a barrel for the first time since May 2009.
Inventories of distillate fuel, a category that includes heating oil and diesel, increased by a record 11.2 million barrels last week, the Energy Information Administration said. Gasoline stockpiles advanced 8.12 million barrels while crude supplies decreased 3.06 million.
Crude slumped by 48 percent last year, the most since the 2008 financial crisis, as the U.S. pumped at the fastest pace in more than three decades and the Organization of Petroleum Exporting Countries decided to maintain its output ceiling. The oversupply may take œmonths or years to be absorbed, United Arab Emirates Energy Minister Suhail Al Mazrouei said.
WTI for February delivery increased 40 cents, or 0.8 percent, to $48.33 a barrel at 11:08 a.m. on the New York Mercantile Exchange, paring an advance of as much as 2.9 percent. Futures earlier touched $46.83, the lowest level since April 2009. The volume of all futures traded was 58 percent above the 100-day average for the time of day.