NEW YORK (Reuters) - Oil fell more than $1 a barrel on Wednesday, weighed down by a larger-than-expected rise in crude stocks and a stronger U.S. dollar.
U.S. crude oil futures for May settled at $80.61 a barrel, down $1.30.
Crude touched a session low of $79.88 a barrel after the U.S. Energy Information Administration (EIA) reported a bigger jump in crude inventories than the market expected. But positive gasoline demand data helped stem the price decline.
Crude futures have traded between $69 and $84 this year.
London ICE Brent for May settled at $79.62, down $1.08 after earlier dipping to a low of $78.90.
U.S. crude stockpiles jumped 7.3 million barrels in the week ended March 19, the EIA said, in line with a 7.5 million barrel build reported by the American Petroleum Institute (API) on Tuesday.
“The EIA data essentially mirrors that of API, with gasoline being the exception. Larger-than-expected builds in crude oil reduced prices, not to ashes, but to $80,” said Jay Levine of enerjay LLC, based in Portland, Maine.
Brad Samples at Summit Energy said the build mostly came from imports, noting that refineries could process more oil as the U.S. driving season got underway.
“The big build all comes from imports, which rose to their highest level since September, 2009,” he said.
“Refinery utilization rates have been rising along with import levels, and the rise will probably continue as we head toward the (U.S.) driving season. We’ve been eating away at gasoline stocks,” he added.
The EIA said gasoline stocks fell 2.7 million barrels, more than the 1.3 million forecast in a Reuters poll of analysts.
Some analysts said the market was watching the dollar and European economies and was unable to take a fundamental spur to break out of current ranges.
“The market is so entrenched in this trading range -- $77.50 on the downside and $83.50 on the upside -- that no one is really interested in taking a position either way. Traders have their minds on other markets such as the U.S. dollar and the whole European quagmire,” Mike Zarembski at Optionsxpress in Chicago said.
The dollar rose against the euro after Fitch Ratings cut Portugal’s sovereign credit rating one notch to AA-, putting further pressure on the single currency.
Data in the euro zone painted a mixed picture on the economy, with manufacturing activity growing in March at its highest level since the end of 2006 but industrial orders in January falling, underscoring the fragility of the economic recovery.
Additional reporting by Eileen Moustakis, Joshua Schneyer, Robert Gibbons and Gene Ramos in New York, Jo Winterbottom in London; Editing by David Gregorio