- Stockpiles rose last week for fourth time to four-month High
- Cushing crude supplies fall for first time in three weeks
Oil slid after a government report showed U.S. crude inventories grew by the most in six months.
West Texas Intermediate futures for December delivery ended at the lowest settlement in almost three weeks. Inventories expanded in the world’s biggest oil consumer by 8.03 million barrels last week, the Energy Information Administration said. A Bloomberg survey forecast a gain of 3.75 million. Refineries processed more crude for the first time in five weeks.
Oil failed to sustain a gain above $50 a barrel earlier this month amid signs the market surplus will persist as the Organization of Petroleum Exporting Countries continues to pump above its target. U.S. stockpiles remain more than 100 million barrels higher than the five-year seasonal average even as output falls and drilling rigs are idled.
"What’s interesting is that the build occurred with a modest increase in refinery operations," said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $3.4 billion. "Inventories will continue to grow for a couple of weeks. The market is acting like it wants to go down."
December WTI declined $1.09, or 2.4 percent, to $45.20 a barrel on the New York Mercantile Exchange, the lowest settlement for front-month futures since Oct. 1.
Brent for December settlement fell 86 cents, or 1.8 percent, to $47.85 a barrel on the London-based ICE Futures Europe exchange.
U.S. crude stockpiles increased to 476.6 million barrels in the week ended Oct. 16, the highest level since May 29. Stockpiles at Cushing, Oklahoma, the delivery point for WTI, fell 78,000 to 54.1 million. Refineries operated at 86.4 percent of their capacity, up from 86 percent the previous week.
"The crude build is pretty big even for refinery maintenance seasons," said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. "That’s going to be a bit bearish."
Crude inventories in the Gulf Coast, known as PADD 3, increased to 247.2 million barrels, the highest level since weekly data started in 1990.
Crude production was unchanged at 9.1 million barrels a day last week, the EIA said. Rigs targeting oil in the U.S. fell by 10 to 595, the lowest level in five years, Baker Hughes Inc. said Oct. 16.
Representatives of OPEC and producers outside the 12-member group met for a technical meeting in Vienna on Wednesday. Venezuela Oil Minister Eulogio del Pino said he proposed that heads of state from OPEC and non-OPEC nations meet in November to discuss what he termed an “equilibrium” oil price necessary to ensure sufficient future supply.
“We should regulate, govern and control the market and the process of setting prices for oil starting right now,” Venezuelan President Nicolas Maduro said on state television Wednesday.