MARK SHENK

WASHINGTON, D.C. (Bloomberg) -- Oil extended losses after the biggest U.S. crude stockpile increase in six months bolstered speculation a global surplus will persist.

Inventories climbed 7.56 MMbbl last week, the most since April, according to Energy Information Administration data. The gain left supplies more than 100 MMbbl above the five-year seasonal average level. Refinery operations slowed to the lowest level since January.

Oil has retreated on signs the market remains oversupplied after advancing above $50/bbl last week for the first time since July. The Organization of Petroleum Exporting Countries continues to pump above its target, while other exporters, including Mexico and Russia, said they won’t cut output.

"This is a very bearish crude number," said Adam Wise, who helps run a $7-billion oil and gas bond and private equity portfolio as a managing director at John Hancock in Boston. "On the supply side oil output has climbed in Russia, Mexico and OPEC, and that’s making its way here. This is happening in the midst of falling refinery utilization here, which is curbing demand."

U.S. Supplies

West Texas Intermediate for November delivery dropped $1.27, or 2.7%, to $45.37/bbl at 11:23 a.m. on the New York Mercantile Exchange. Futures touched $45.27, the lowest since Oct. 5. The volume of all futures traded was 5.4% above the 100-day average.

Brent for November settlement, which expires Thursday, fell 89 cents, or 1.8%, to $48.26/bbl on the London-based ICE Futures Europe exchange. The more-active December contract slipped 89 cents at $48.80.

Russia reiterated its aim to maintain supplies and market share. Output reductions are “purely a short-term measure, and in the future it will result in a greater misbalance of the oil market,” Energy Minister Alexander Novak said in an interview with CNBC. Novak told reporters in Astana, Kazakhstan, that Russia wouldn’t rule out discussing production cuts at a meeting with OPEC next week.

“Supplies from low-cost players like Saudi Arabia, Iraq, Russia are all surprising on the upside and non-OPEC production outside of the U.S.—Norway, Brazil—too has been on the upside,” Jeffrey Currie, head of commodities research at Goldman Sachs Group Inc., said in an interview on Bloomberg Television. “The market is substantially more oversupplied than we initially thought."

Mexico plans to attend the OPEC technical meeting on Oct. 21 to exchange information, according to Energy Minister Pedro Joaquin Coldwell. It’s “not in a position to cut production,” he said Wednesday. Output in Norway will probably rise this year, according to the Norwegian Petroleum Directorate, which had previously predicted a decline.