Oil in New York traded near the lowest close since July after U.S. inventories rose more than forecast and fuel demand dropped.
Prices were little changed after five days of losses, the longest decline in five months. The Energy Department said crude stockpiles jumped 5.9 million barrels last week, more than three times the median 1.8 million gain forecast by analysts in a Bloomberg News survey. Gasoline demand fell to a seven-month low, and the Federal Reserve said unemployment remains elevated.
“Inventory data overnight was a lot more bearish than expected,” said Michael McCarthy, a chief market strategist at CMC Markets in Sydney. The Fed’s comments “added to a general risk-off tone to the markets overnight,” he said.
Crude for December delivery was at $86.05 a barrel in electronic trading on the New York Mercantile Exchange, up 32 cents, at 1:30 p.m. Singapore time. The contract settled at $85.73 yesterday, the lowest since July 10. Prices are down 13 percent this year.
Brent oil for December settlement on the London-based ICE Futures Europe exchange was at $108.12 a barrel, up 27 cents. The European benchmark crude was at a premium of $22.05 to New York-traded West Texas Intermediate grade, from $22.12 yesterday.
U.S. crude stockpiles increased to 375.1 million barrels in the week ended Oct. 19, the highest for this time of year since the government started reporting inventories in 1982. Supplies at Cushing, Oklahoma, the delivery point for the WTI contract, rose by 40,000 barrels to 44.1 million, 40 percent more than a year ago.
Production in the U.S. climbed for a seventh week to 6.61 million barrels a day, a 17-year high. Imports gained for a fourth week, up 5.7 percent at 8.82 million barrels a day. Refinery utilization averaged 87.2 percent of capacity, from 87.4 percent.
U.S. gasoline stockpiles rose 1.44 million barrels to 198.6 million last week, according to the Energy Department. Supplies were forecast to increase by 500,000 barrels. Distillate fuels, which include heating oil and diesel, slid 646,000 barrels to 118 million. They were expected to drop 1.2 million.
Gasoline consumption declined 2.7 percent to 8.49 million barrels a day, the slowest rate since March 16. The four-week average fell to 8.61 million, a six-month low.
Gasoline for November delivery in New York decreased for a 10th day yesterday, capping the longest losing streak since futures began trading in May 1986. The contract was 0.3 percent higher at $2.61 a gallon today.
TransCanada Corp. took pressure restrictions off its 590,000 barrel-a-day Keystone oil pipeline, according to James Millar, a company spokesman. The pipe runs 2,150 miles (3,459 kilometers) from Hardisty, Alberta, to Wood River and Patoka, Illinois, and to the storage hub at Cushing. It was shut Oct. 17 for repairs.
The Fed said yesterday it would maintain $40 billion in monthly purchases of mortgage-backed securities aimed at speeding economic growth.
“Strains in global financial markets continue to pose significant downside risks,” the Federal Open Market Committee said at the conclusion of a two-day meeting in Washington. The central bank repeated that interest rates are likely to stay near zero “at least through mid-2015.”
Hurricane Sandy, which closed businesses and airports in Jamaica as it moved north in the Caribbean, was due to approach the U.S. East Coast next week, avoiding the Gulf of Mexico. The Gulf is home to 23 percent of U.S. oil production, 7 percent of natural-gas output and 44 percent of refining capacity, according to the Energy Department.
Oil’s decline in New York is slowing as a technical indicator shows futures have fallen too far for further losses to be sustainable, according to data compiled by Bloomberg. The 14-day relative strength index yesterday dropped to 31.6, the lowest since June 28. Crude rebounded from a nine-month low in June when the RSI slid below 30, signaling the market was oversold. Today’s reading is 32.8.