Despite a larger-than-expected drop in U.S. crude oil stocks as reported by the U.S. Energy Department, the price of light sweet crude oil for October delivery settled lower Wednesday.
The WTI ended the day $1.30 lower at $88.91 a barrel. The U.S. Energy Information Administration (EIA) reported Wednesday that commercial crude inventories fell 6.7 million barrels last week to 346.4 million barrels, reflecting a 1.9 percent draw from the previous week. Analysts surveyed by Platts were expecting a more modest 2.9 million-barrel decrease.
What would otherwise be a bullish stockpiles report from the EIA, however, stems largely from shut-in production during recent tropical storm activity in the Gulf of Mexico. Instead, increasing stocks of gasoline and distillates that have led refiners to cut utilization placed downward pressure on the WTI during Wednesday's trading.
The Brent contract price, meanwhile, benefited from a weaker dollar and gained 51 cents to settle at $112.40. Oil, priced in U.S. dollars, becomes a more attractive buy for investors holding other currencies when the greenback loses strength. The euro rose against the dollar on positive sentiment about the euro-zone's ability to weather the current debt crisis.
The WTI traded within a range from $88.21 to $90.25 and Brent prices fluctuated from $110.92 to $112.66.
Autumn officially starts more than a week from now, but the Midwest and East Coast are getting an early taste of the season this week as an unusually strong cold front passes through the regions. Thanks to the projected cooler temperatures, and the expected heating demand, October natural gas settled above the $4.00 mark Wednesday. After peaking at $4.10 and bottoming out at $3.955, natural gas ended the day at $4.04 per thousand cubic feet.
Gasoline for October delivery lost a penny to settle at $2.73 a gallon. The front-month contract fluctuated from $2.68 to $2.75.
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