Oil extends drop after inventories increase

West Texas Intermediate oil fell for the fourth time in five days as a government report showed U.S. inventories increased more than expected last week.

Prices dropped as much as 1.3 percent after the Energy Information Administration, the Energy Department’s statistical arm, said supplies rose 3.83 million barrels in the week ended March 1. Analysts expected a gain of 788,000 barrels.

Oil stockpiles rose to 381.4 million barrels last week, the most since June 29, the EIA reported. Supplies at Cushing, Oklahoma, the delivery point for WTI, gained 257,000 barrels to 50.8 million.

Venezuelan President Hugo Chavez died yesterday, and an election must be held within 30 days. U.S. crude imports from Venezuela, OPEC’s fourth-largest producer, totaled 549,000 barrels in the week ended Feb. 22, down 44 percent from a year earlier, EIA data showed. U.S. domestic output rose to as much as 7.12 million barrels a day in February, the most since 1992.

Venezuela pumped 2.86 million barrels of oil a day last month, behind Saudi Arabia, Iraq and Kuwait in the 12-member Organization of Petroleum Exporting Countries, according to a survey of oil companies, producers and analysts.

WTI for April delivery declined to $89.55 a barrel on the New York Mercantile Exchange.

Brent for April settlement fell 94 cents, or 0.8 percent, to $110.67 on the London-based ICE Futures Europe exchange.