Oil prices end at 1-week low as EIA reports nearly 6 million-barrel weekly rise in U.S. supplies
Oil futures ended Wednesday at their lowest in just over a week after the Energy Information Administration reported a larger-than-expected weekly U.S. crude-supply increase of almost 6 million barrels, but gasoline inventories declined a bit more than forecast.
The EIA crude supply build “exceeded expectations even with refinery runs higher, but imports recovered notably,” said Marshall Steeves, energy markets analyst at IHS Markit. “The draws in distillates and gasoline were unsurprising,” as gasoline demand has been unseasonably high.
West Texas Intermediate crude for December delivery CLZ19, -1.19% fell 48 cents, or 0.9%, to settle at $55.06 a barrel on the New York Mercantile Exchange. Front-month December Brent crude BRNZ19, +0.03%, which expires at Thursday’s settlement, fell by 98 cents, or 1.6%, to $60.61 a barrel on ICE Futures Europe. Both crude benchmarks marked their lowest settlements since Oct. 22, according to Dow Jones Market Data.
The EIA on Wednesday reported that U.S. crude supplies rose by 5.7 million barrels for the week ended Oct. 25. Crude supplies were forecast to increase by 2.5 million barrels, according to analysts polled by S&P Global Platts.
The American Petroleum Institute released its data to media on Wednesday, revealing a weekly fall of 708,000 barrels in crude inventories. The market saw conflicting API data from secondary sources on Tuesday, when the API issued its figures to its members.
A strong rebound in Canadian imports and another U.S. Strategic Petroleum Reserve release “has encouraged a build to crude inventories” in the EIA report, said Matt Smith, director of commodity research at ClipperData.
“Refining activity has held below the 16 million barrel-per-day mark for a fourth consecutive week, as refiners drag their feet in their return from seasonal maintenance,” he told MarketWatch. “Tempering the bearish influence of the solid crude build are draws to both distillates and gasoline amid a tick higher in implied demand.”
The EIA data on Wednesday showed supply declines of 3 million barrels for gasoline and 1 million barrels for distillates. The S&P Global Platts survey showed expectations for supply decreases of 2.5 million barrels for gasoline and 2.4 million barrels for distillates.
On Nymex, November gasoline RBX19, -1.86% edged down by 1.3% to $1.69645 a gallon, while November heating oil HOX19, -2.42% lost 2.2% at $1.9136 a gallon. The November contracts expire at the Thursday’s settlement.
December natural gas NGZ19, +1.59% rose 2% to settle at $2.691 per million British thermal units.
Natural-gas prices “continue to receive support on the back of forecasts for colder-than-normal temperatures across the central U.S., although [the National Oceanic and Atmospheric Administration] is now predicting warmer temperatures for the western region over the six-to-14 day horizon,” said Christin Redmond, commodity analyst at Schneider Electric.
Support for natural gas remains despite expectations for “yet another larger-than-normal storage injection” to be announced by the EIA Thursday for the week ended Oct. 25, she said in a note. Analysts polled by S&P Global Platts forecast a weekly U.S. supply rise of 85 billion cubic feet.