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By Bloomberg

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

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 more than 30 percent since March 18 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.

“Even though U.S. oil production is likely to decrease somewhat in the coming weeks, this will not by any means be sufficient to significantly reduce the existing oversupply,” Eugen Weinberg, head of commodity research at Commerzbank AG in Frankfurt, said in a report.

West Texas Intermediate for June delivery was at $55.92 a barrel in electronic trading on the New York Mercantile Exchange, down 24 cents, at 9:10 a.m. London time. The contract declined 45 cents to $56.16 on Wednesday. Total volume was about 48 percent below the 100-day average. Prices have climbed 5 percent this year.

Crude Supplies

Brent for June settlement was 39 cents lower at $62.34 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 $6.46 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, the slowest pace in six weeks. Output averaged 9.42 million a day through March 20, the most since at least January 1983.

Cost Cuts

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

Half of the 41 fracking companies in the country will be out of business 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.