Investing.com - U.S. oil futures extended losses to hit a five-week low on Wednesday, after a U.S. government report showed that oil supplies rose much more-than-expected last week.
On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in April dropped to a session low of $98.16 a barrel, the weakest level since February 7.
Nymex oil last traded at $98.37 a barrel during U.S. morning hours, down 1.66%, or $1.66. Prices were at $98.52 a barrel prior to the release of the supply data.
The April contract lost 1.08%, or $1.09, on Tuesday to settle at $100.03 a barrel.
Nymex oil futures were likely to find support at $97.14 a barrel, the low from February 7 and resistance at $101.52 a barrel, the high from March 11.
The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories rose by 6.2 million barrels in the week ended March 7, above expectations for an increase of 2.2 million barrels.
Total U.S. crude oil inventories stood at 370 million barrels as of last week.
The report also showed that total motor gasoline inventories decreased by 5.2 million barrels, compared to forecasts for a drop of 2 million barrels, while distillate stockpiles decreased by 0.5 million barrels, below expectations for a withdrawal of 0.9 million barrels.
Oil prices came under additional pressure on reports that the U.S. plans to release up to 5 million barrels of oil from its Strategic Petroleum Reserves, according to a government source.
The release will serve as a test sale to check the operational capacity of system infrastructure. The timing of such a release remains unclear.
Meanwhile, investors remained cautious as growing concerns over the health of China’s economy dampened demand for growth-linked assets.
The Asian nation is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for April delivery declined 0.68%, or $0.74 cents, to trade at $107.81 a barrel, while the spread between the Brent and U.S. crude contracts stood at $9.44 a barrel.