Crude oil dropped to a two-week low as a U.S. government report showed supplies surged, and on signals that U.S. economic growth is slowing.
Oil fell as much as 2% after the Energy Department said stockpiles rose 3.42 million barrels to 366.5 million last week, the highest level since October. Inventories were forecast to gain two million barrels. Lower-than-forecast growth in service industries and employment reduced optimism about the economic outlook.
Crude oil for June delivery fell $2.07, or 1.9%, to $108.98 U.S. a barrel late Wednesday morning on the New York Mercantile Exchange. The contract touched $108.80 U.S., the lowest intraday price since April 20.
Oil traded at $109.56 U.S. a barrel before the release of the report at 10:30 a.m. ET in Washington.
Gasoline for June delivery dropped 3.82 cents, or 1.1%, to $3.2912 U.S. a gallon in New York. It slipped to $3.2774 U.S., the lowest level since April 21.
Crude oil also declined after U.S. companies added fewer jobs than forecast. Employment rose by 179,000 in April from a revised 207,000 the prior month, according to figures from ADP Employer Services. The median estimate of 34 economists called for a 198,000 advance this month.
