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By Bloomberg

Oil’s rebound from a six-year low faltered amid the lowest trading volatility since December as U.S. crude stockpiles expanded further from a record.

Futures were little changed in New York near $56 a barrel, close to where the market has settled each day since April 15. Crude inventories increased to 489 million barrels last week, the highest level in data that started in August 1982, the Energy Information Administration reported Wednesday. The CBOE Crude Oil Volatility Index, which measures price fluctuations using options on the U.S. Oil Fund, slid below 40 for the first time in more than four months.

Oil’s advance of almost 30 percent since March has stalled on signs that a global supply glut that drove prices into a bear market last year will persist. While the U.S. is pumping crude at a reduced pace as drillers cut the number of active rigs, the nation’s output remains near a record.

“Production is down but stockpiles are still rising and that’s a telling sign,” Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney, said by phone. “We’ve also had a significant bounce, so expect a correction.”

West Texas Intermediate for June delivery was at $56.28 a barrel in electronic trading on the New York Mercantile Exchange, up 12 cents, at 12:26 p.m. Singapore time. The contract declined 45 cents to $56.16 on Wednesday. Total volume was about 57 percent below the 100-day average. Prices have climbed 5.7 percent this year.

Crude Supplies

Brent for June settlement was 3 cents lower at $62.70 a barrel on the London-based ICE Futures Europe exchange. The contract gained 65 cents to $62.73 on Wednesday. The European benchmark crude traded at a premium of $6.44 to WTI.

Crude stockpiles in the U.S., the world’s biggest oil consumer, surged by 5.3 million barrels through April 17, according to the EIA. An increase of 3.2 million was forecast in a Bloomberg survey of analysts. Supplies haven’t been this high since 1930, according to monthly records from the Energy Department’s statistical arm dating back to 1920.

Production dropped by 18,000 barrels a day to 9.37 million a day, the slowest pace in six weeks. Output averaged 9.42 million a day through March 20, the most since at least January 1983.

The U.S. oil boom has been driven by a combination of horizontal drilling and hydraulic fracturing, which has unlocked shale formations from Texas to North Dakota.

Cost Cuts

Half of the 41 fracking companies in the country will be dead or sold by year-end because of reduced spending, according to Rob Fulks, a marketing director at Weatherford International Plc. The firm, which runs the fifth-largest fracking operation in the U.S., has been forced to cut costs “dramatically” in response to customer demand, he said in an interview in Houston on Wednesday.

In China, the world’s second-biggest oil consumer, a preliminary manufacturing gauge fell to a 12-month low of 49.6, indicating that government efforts to cushion an economic slowdown are yet to revive the nation’s factories. Readings below 50 signal contraction.