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Oil drops as US crude supplies grow
[NEW YORK] Oil prices fell on Wednesday as an increase in US crude stockpiles provided fresh fuel for concerns about the global oversupply.
US benchmark West Texas Intermediate for delivery in December dropped US$1.09, or 2.4 per cent, to US$45.20 a barrel on the New York Mercantile Exchange.
Brent North Sea crude for December delivery, the international benchmark, fell to US$47.85 a barrel in London trade, down 86 cents (1.8 per cent) from Tuesday's close.
US commercial crude-oil inventories jumped by eight million barrels to 476.6 million barrels in the week ending October 16, the US Department of Energy said in its weekly report.
The increase was more than double market expectations for a gain of 3.75 million barrels, according to analysts polled by Bloomberg News.
"Refineries in the US are processing less crude oil because of ongoing maintenance work, which is driving up stocks," said Commerzbank analysts in a research note.
"Any more sustained price recovery would require clear signs that US crude oil production is continuing to fall."
But US production was unchanged at 9.1 million barrels per day for a second straight week.
Matt Smith of ClipperData said the report's "only saving grace" was a larger-than-expected decline in US gasoline and distillate inventories.
"That helped pare a bit of those losses" in the day's trading, Mr Smith said. "It was really a relatively bearish report and we had a bearish response."
Meanwhile, the market appeared to pay scant attention to a technical meeting of producers in Vienna on Wednesday.
Participants from the Organisation of the Petroleum Exporting Countries oil cartel and non-Opec producers did not discuss production limits or price targets, Bloomberg reported, citing an unnamed Russian official.