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By Bloomberg

Oil declined from a three-day high in New York amid estimates that U.S. crude inventories increased to their highest level since 1982.

West Texas Intermediate futures dropped as much as 2 percent. Crude stockpiles probably expanded for a third week, a Bloomberg News survey showed before an Energy Information Administration report on Wednesday. Saudi Arabian Oil Co.’s Chief Executive Officer Khalid Al-Falih reiterated government policy that the kingdom won’t balance global crude markets “singlehandedly.”

Oil slid almost 50 percent last year as the U.S. pumped at the fastest pace in more than three decades while the Organization of Petroleum Exporting Countries resisted calls to cut supply. Saudi Arabia, the world’s biggest oil exporter, led the group’s Nov. 27 decision to maintain output levels.

“Fundamentals are set to weaken in the first half of the year,” Miswin Mahesh, an analyst at Barclays Plc in London, said in a report. “We now expect a long period of oversupply stretching into at least 2016.”

Futures Retreat

West Texas Intermediate for March delivery decreased as much as 91 cents to $45.32 a barrel in electronic trading on the New York Mercantile Exchange and was at $45.35 at 10:02 a.m. London time. The contract climbed $1.08 to $46.23 on Tuesday, the first gain in four days and the highest settlement since Jan. 22. The volume of all futures traded was about 31 percent below the 100-day average for the time of day.

Brent for March settlement lost as much as 81 cents, or 1.6 percent, to $48.79 a barrel on the London-based ICE Futures Europe exchange. It advanced $1.44 to $49.60 on Tuesday. The European benchmark crude traded at a premium of $3.74 to WTI.

Crude inventories in the U.S., the world’s biggest oil consumer, probably increased 3.85 million barrels to 401.7 million in the week ended Jan. 23, according to the median estimate in the Bloomberg survey of 10 analysts. That would be the highest level in records compiled since August 1982 by the EIA, the Energy Department’s statistical arm.

Stockpiles rose by 12.7 million barrels last week, the industry-funded American Petroleum Institute in Washington said on Tuesday, based on reports on Twitter.

Saudi Arabia will maintain its current policy, refusing to pare output and bolster prices alone, even as prices fall to levels “too low for everybody,” Saudi Aramco’s Al-Falih said at a conference in Riyadh.

“Supply and demand and the rules of economics will govern. It will take time for the current glut to be removed,” Al-Falih said. “Saudi Arabia will not singlehandedly balance the market in a downturn,” he said.

Chinese oil demand is forecast to expand by 3 percent to 534 million metric tons this year, China National Petroleum Corp., the country’s largest oil and gas producer, said in an annual research report.