Oil prices fell on Thursday for the third straight trading session, dragged down by economic concerns and rising US petroleum inventories. Front-month US crude for June delivery settled down $1.25 to $74.40 a barrel, having earlier slid to $73.62, the lowest since February 12. US crude prices have fallen in seven of the last eight sessions.
-- Brent premium over WTI tops $6 first time in 15 months.
June's discount to July US crude widened in early trading due to rising inventories at the delivery point for the New York Mercantile Exchange's oil futures contract in Cushing, Oklahoma. The spread blew out to nearly $5 - the highest level since February 2009 - in early trading, before narrowing later as short-covering lifted the front month. At settlement, the spread was $4.59 a barrel, up from $4.50 on Wednesday.
"After that further widening of US July crude's premium over July, we've seen some short-covering, and that helped pare some of June's losses," said Tom Knight, a trader at Truman Arnold in Texarkana, Texas. London Brent fell $1.09 to settle at $80.11 a barrel, narrowing its premium over US crude to $5.71, after hitting $6.55, highest in 15 months.
Rising global energy demand and hopes Europe can get its debt crisis under control have supported Brent's rise for three of the previous four sessions before it fell back on Thursday. Industry data provider Genscape said crude at the storage complex at Cushing, Oklahoma, rose by 1.2 million barrels to a record 38.96 million barrels in the week to May 11. The build brought inventories to what experts say is the delivery hub's operating capacity.
The record build has pulled down front-month US crude in recent weeks. Cushing's landlocked location tends to reflect supply and demand in the Midwestern United States, while Brent prices more accurately reflect oil's value to wider markets, analysts said. "In general, Brent is acting as a much better benchmark for global fundamentals at the moment," Barclays Capital analyst Amrita Sen said.
Total US crude inventories were up by 1.9 million barrels in the week to May 11, more than expected, data from the US Energy Information Administration showed on Wednesday. US gasoline inventories unexpectedly dropped by 2.8 million barrels, the EIA said.But, after gaining on Wednesday, US gasoline eased almost 1 percent on Thursday to close at $2.1951 a gallon. Its crack spread over crude - refiners' profits per barrel - rose to $17.79 at settlement, from $17.19 on Wednesday. Earlier in the Thursday's session, the spread reached $19.22, the highest since February 12.
The euro slipped close to its lowest level in 14 months against the dollar, on worries that harsh fiscal tightening in Europe would lead to slower growth. As a results, a broad array of commodities sold off as investors placed safe-haven bets on the dollar. The eurozone debt crisis roiled energy markets last week, knocking US crude from a 19-month peak of $87.15 on May 3.
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