Crude Slumps as U.S. Inventories Rise
U.S. crude-oil futures fell to fresh three-month lows Wednesday after the Energy Department reported a big jump in U.S. oil inventories that signaled the market is well supplied.
Light, sweet crude for December delivery settled 94 cents, or 1.1%, lower at $85.73 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded 40 cents lower at $107.85 a barrel.
The U.S. Energy Information Administration said crude-oil stockpiles rose by 5.9 million barrels to 375 million barrels in the week ended Oct. 19, the highest level for this time of year since the EIA began keeping weekly data in 1982.
Analysts expected crude stockpiles to rise by 1.8 million barrels last week, according to a Dow Jones Newswires survey.
"There's just an abundance of oil in the U.S.," said Tim Evans, an energy analyst at Citi Futures Perspective. He noted that four-week average imports have declined from the same period a year ago, a sign that U.S. supplies are reducing the need for oil from overseas.
The stockpiles data, coupled with weak economic reports out of China and Europe, sent front-month prices lower for the fifth-straight session.
Crude futures have tumbled over the past month after reaching highs of $99 a barrel in mid-September. Investors are concerned about rising oil supplies amid a slowdown in the global economy that will likely weigh on fuel demand. In the U.S., oil output is at the highest level since 1995, EIA data show.
On Wednesday, a measure of euro-zone manufacturing activity was weaker than economists had expected, while a survey of German business sentiment also showed a decline.
Futures for gasoline and heating oil have seen steeper declines this month as investors adjust to signs of a slowing global economy that will likely curtail fuel demand.
Front-month November reformulated gasoline blendstock, or RBOB, settled 0.2 cent lower at $2.6030 a gallon for a record 10th-straight losing session. Over that period, gasoline futures have fallen 12%, while retail U.S. gasoline prices have also slid.
The EIA said gasoline stockpiles rose by 1.4 million barrels, higher than the 600,000-barrel increase forecast by analysts. Data also showed U.S. demand fell to a nine-year low for the latest week.
November heating oil settled 0.4 cent lower to $3.0394 a gallon, the ninth-straight decline.
Stocks of distillate, which include heating oil and diesel, fell by 600,000 barrels, the EIA said. Analysts expected an 800,000-barrel drop.
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