Oil falls on unexpected inventories increase

Crude prices fell on Wednesday as U.S. weekly crude inventories increased unexpectedly. The Energy Information Administration reported that crude stocks added 1.8 million barrels in the week ended March 9, surpassing the expectations and hitting a six-month high. The energy watchdog said that demand from refineries remained weak. Meanwhile, gasoline demand fell 7.2 percent compared to the same period last year in a reflection of high prices and rising fuel efficiency. Distillate demand was down a year-on-year 7.1 percent due to the unseasonably warm weather. Weak demand pushed down the crude prices. Besides, the dollar extended gains on Wednesday. It rose to an 11-month high against the yen and an 1-month high against the euro. The dollar index rose about 0.5 percent. A strengthening dollar made the greenback-denominated commodities less attractive and reduced investors' risk appetite. But tension between Iran and the West lingered. A poll showed that 56 percent Americans supported U.S. military action against Iran if necessary, even if it might lead to higher gasoline prices. Light, sweet crude for April delivery declined 1.28 dollars, or 1.20 percent to settle at 105.43 dollars a barrel on the New York Mercantile Exchange. In London, Brent crude for April delivery fell 1.25 dollars, or 0.99 percent to close at 124.97 dollars a barrel.