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By Bloomberg

Oil fell for a second day after government data showed U.S. refineries reduced their crude use by the most in four months.

Futures slid as much as 1.1 percent in New York. Refinery utilization slowed by 1.8 percentage points in the week ended May 8, the biggest drop since January, the U.S. Energy Information Administration said Wednesday. Gulf-based members of the Organization of Petroleum Exporting Countries are boosting production to defend market share, according to the International Energy Agency. U.S. retail sales were little changed in April from a month earlier, confounding predictions for an increase.

Oil’s recovery from a six-year low is stalling near $60 a barrel amid speculation that the price rebound will sustain a supply glut. U.S. crude stockpiles remain more than 100 million barrels above the five-year average for this time of year and producers there are pumping near a record pace.

“We’ve seen the top of the oil price,” Michael Hewson, London-based senior analyst at CMC Markets Plc, said by phone. “Disappointing recent data points to a potential slowdown in the U.S. economy” and oil will lose $3 a barrel over the next week as an oversupply persists, he said.

West Texas Intermediate for June delivery declined as much as 68 cents to $59.82 a barrel in electronic trading on the New York Mercantile Exchange and was at $60.12 at 8:50 a.m. London time. The contract lost 25 cents to $60.50 on Wednesday. Total volume was about 49 percent below the 100-day average for the time of day. Prices have increased 13 percent this year.

U.S. Stockpiles

Brent for June settlement, which expires Thursday, fell as much as 49 cents, or 0.7 percent, to $66.32 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $6.42 to WTI. The more-active July contract was 18 cents lower at $67.09.

U.S. refineries operated at 91.2 percent of capacity last week, down from 93 percent in the previous period, according to the EIA. Crude inventories shrank by 2.2 million barrels to 484.8 million. While that’s a second weekly decrease, supplies are still near the highest level since 1930, based on monthly records from the Energy Department’s statistical arm dating back to 1920.

U.S. production expanded by 5,000 barrels a day to 9.37 million, the data showed. Output averaged 9.42 million a day in the week to March 20, the fastest pace since at least January 1983.

OPEC ‘Defense’

Supplies from Saudi Arabia, Kuwait and the United Arab Emirates remain near the highest level in three decades, the IEA said in its monthly report Wednesday. The three countries are among the four largest producers in OPEC, whose 12 members pump about 40 percent of the world’s oil.

“The move by the group’s core Gulf members last November not to cut production in defense of prices was only the first step in a plan that includes actually ramping up output and aggressively investing in future production capacity,” the Paris-based adviser to 29 industrialized economies said.

Saudi Arabia led OPEC’s decision Nov. 27 to maintain collective quotas at 30 million barrels a day. The group, scheduled to meet again June 5 in Vienna, has supplied above that target for the past 11 months, according to a Bloomberg survey of companies and analysts.

In Libya, Eni SpA is producing about 300,000 barrels a day of crude, bringing output above pre-civil war levels amid strife in the OPEC nation. Oil prices will average $55 to $60 a barrel this year, Chief Executive Officer Claudio Descalzi said in an interview in Rome Wednesday.

U.S. retail sales were little changed in April, following a 0.2 drop from January through March, figures from the Commerce Department showed Wednesday. The median forecast of 88 economists surveyed by Bloomberg projected April sales would rise 0.2 percent.