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By Bloomberg

Oil pared its biggest two-day surge since February before U.S. government data forecast to show crude inventories expanded further from a record.

Futures fell as much as 2.2 percent in New York. Crude stockpiles probably gained by 3.25 million barrels last week, a Bloomberg survey showed before a report from the Energy Information Administration. OPEC won’t cut output without cooperation from producers elsewhere, according to Saudi Arabia’s Oil Minister Ali al-Naimi, who led the group in November to maintain supply targets amid a global surplus.

Oil is failing to sustain a recovery this year amid speculation the glut that drove prices almost 50 percent lower in 2014 will persist. The EIA, the Energy Department’s statistical arm, cut its projection for U.S. output as drillers idled the number of rigs to the fewest in four years.

“The EIA is predicting average production of 9.23 million barrels a day in the U.S. over 2015 and that kind of level is still likely to see an ongoing supply surplus,” Ric Spooner, a chief strategist at CMC Markets in Sydney, said by phone. “Rising output from Saudi Arabia just increases the cuts that have to be found elsewhere.”

West Texas Intermediate for May delivery dropped as much as $1.21 to $52.77 a barrel in electronic trading on the New York Mercantile Exchange and was at $52.97 at 12 p.m. Sydney time. The contract advanced 9.9 percent the past two days to close Tuesday at $53.98, the highest price since Dec. 30. Total volume was about 36 percent below the 100-day average.

U.S. Supplies

Brent for May settlement slid as much as 85 cents, or 1.4 percent, to $58.25 a barrel on the London-based ICE Futures Europe exchange. It climbed 98 cents to $59.10 on Tuesday. The European benchmark crude traded at a premium of $5.50 to WTI.

Crude inventories in the U.S., the world’s largest oil consumer, rose to 471.4 million barrels through March 27, the highest level in weekly EIA records dating back to August 1982. Stockpiles increased by 12.2 million barrels last week, the industry-funded American Petroleum Institute in Washington reported on Tuesday, a person familiar with the data said.

The EIA cut its 2015 production estimate by 120,000 barrels from last month’s forecast to 9.23 million, its monthly Short- Term Energy Outlook showed on Tuesday. The number of rigs targeting oil decreased to 802 last week, the fewest since March 2011, according to Baker Hughes Inc., an oilfield services company.

Saudi Arabia, the world’s biggest oil exporter, expanded output in March to 10.3 million barrels a day, al-Naimi said in Riyadh on Tuesday. That’s the highest level in the Joint Organisations Data Initiative database since 2002. The kingdom will continue pumping at about 10 million a day, he said.

The Organization of Petroleum Exporting Countries, whose 12 members supply about 40 percent of the world’s crude, produced 31 million barrels a day last month, according to data compiled by Bloomberg. That exceeded its collective quota of 30 million a day for a 10th straight month.