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August 24, 2016 11:40 AM, EDT

Oil Extends Decline After Unexpected US Crude Stockpile Gain

Eddie Seal/Bloomberg News

Oil extended its decline after a government report showed that U.S. crude stockpiles unexpectedly rose last week.

Crude inventories climbed by 2.5 million barrels in the week ended Aug. 19, according to an Energy Information Administration report. A Bloomberg News survey ahead of the data had forecast inventories would fall by 850,000 barrels. Iran’s oil ministry said the country hasn’t yet decided whether to join informal OPEC talks next month in Algiers following a Reuters report that the nation had confirmed its attendance at the gathering.

"We’re still in a fundamentally oversupplied market," said Adam Wise, who helps run a $7 billion oil and natural-gas bond and private equity portfolio at John Hancock in Boston. "The build was unexpected and comes amid a lot of OPEC chatter making for a sloppy, if range-bound market."

Crude entered a bull market Aug. 18, less than three weeks after it tumbled into a bear market. Prices surged partly on speculation that informal discussions among members of the Organization of Petroleum Exporting Countries may lead to action to stabilize the market. Iraqi Oil Minister Jabbar Al-Luaibi has asked international companies to increase output to boost national revenue, according to a statement.

U.S. crude stockpiles rose to 523.6 million, leaving supplies at the highest seasonal level in decades, the EIA report showed. Inventories at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil-storage hub, advanced by 375,000.