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A pump used for pumping crude oil from the ground sits above a well in a farmer's field on Jan. 20 near McLeansboro, Ill.Scott Olson/Getty Images

Oil fell after a government report showed that U.S. crude supplies surged the most in almost 14 years.

Inventories rose 10.1 million barrels in the week ended Jan. 16, the biggest gain since March 2001, according to the Energy Information Administration. Refineries operated at 85.5 percent of their capacity, the lowest level since April 2013 as units were idled for maintenance.

"The 10 million-barrel plus increase was a big surprise," Gene McGillian, a senior analyst at Tradition Energy in Stamford, Connecticut, said by phone. "The big drop in refinery runs left nowhere for the crude to go but storage. This suggests that we'll see more big supply builds in the future with production at such high levels."

West Texas Intermediate crude for March delivery slipped 85 cents, or 1.8 percent, to $46.93 a barrel at 12.55 p.m. on the New York Mercantile Exchange. The volume of all futures traded was 35 percent above the 100-day average for the time of day.

Brent for March settlement fell 10 cents to $48.93 a barrel on the London-based ICE Futures Europe exchange. Volume was up 17 percent from the 100-day average. The European benchmark oil traded at a $2 premium to WTI.

Refinery Maintenance

The gain left crude supplies at 397.9 million barrels a day last week, the highest level since May. A 2.7 million-barrel stockpile gain was projected according to the median of 10 analyst responses in a Bloomberg survey.

Crude output fell 6,000 barrels a day from 9.19 million, little changed from Jan. 9 when it was at the highest level in weekly estimates that started in January 1983, according to EIA data. The combination of horizontal drilling and hydraulic fracturing, or fracking, has unlocked supplies from shale formations in the central U.S.

Crude imports slipped 274,000 barrels a day to 7.22 million. Arrivals from Canada, the biggest source of U.S. imports, exceeded 3 million barrels a day for a third week.

"There's a clear bearish combination here, with ongoing robust imports from Canada and a sharp decline in refinery activity for planned seasonal maintenance," Tim Evans, an energy analyst at Citi Futures Perspective in New York, said by phone. "We're close to a modern-day record for crude supplies. There's clearly too much oil."

Maintenance Programs

The 5.5 percentage point reduction in refinery utilization was the biggest since September 2008. U.S. refineries started conducting seasonal maintenance. Plants typically schedule planned work for late winter, when they move from maximizing distillate output to producing gasoline.

Chevron Corp. shut a 210,000 barrel-a-day crude- distillation unit at its 330,000 barrel-a-day Pascagoula refinery on Jan. 5, Genscape Inc. said. BP Plc's Whiting refinery in Indiana closed a catalytic reformer on Jan. 11, Louisville, Kentucky-based Genscape, an energy information company, said.

"There were probably weather-related issues that delayed crude movement in addition to unplanned refinery outages," Stephen Schork, president of the Schork Group Inc. in Villanova, Pennsylvania, said by phone. "The combination of these factors explains the big crude build."

Fuel Stockpiles

Gasoline supplies rose 588,000 barrels to 240.9 million. Inventories of distillate fuel declined 3.27 million to 136.6 million. U.S. crude production decreased 6,000 barrels a day to 9.19 million last week, said the EIA, the Energy Department's statistical arm.

Gasoline futures for February delivery rose 1.26 cents, or 1 percent, to $1.3381 a gallon in New York. February ultra-low sulfur diesel rose 0.83 cent, or 0.5 percent, to $1.6547.

Regular gasoline at U.S. pumps fell to the lowest level since April 2009. The average retail price slipped 0.7 cents to $2.041 a gallon, according to Heathrow, Florida-based AAA, the nation's biggest motoring group.

Futures slipped earlier after the announcement of the European Central Bank's expanded asset-purchase program boosted the U.S. dollar.

ECB President Mario Draghi announced plans to buy 60 billion euros ($69 billion) a month of public and private debt until September 2016. The 19-nation shared currency slipped to an 11-year low against the dollar.

ECB Program

The ECB president side-stepped German-led opposition to quantitative easing in a push to revive inflation and the euro- area economy. The risk of deflation and stagnation forced Mr. Draghi's hand six years after the Federal Reserve took a similar step to inject cash into the U.S.

The shift exacerbates a divergence in global monetary policy. While the Fed is now considering when to tighten credit, central banks in Denmark, Turkey, India, Canada and Peru all announced surprise rate cuts in the past week. The Swiss National Bank shocked investors by dropping a cap on the franc.

Producers outside the Organization of Petroleum Exporting Countries should be first to reduce their output amid a surplus that's pushed crude below $50 a barrel, Secretary-General Abdalla El-Badri said in an interview with Bloomberg Television.

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