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Oil futures declined on Wednesday, on track for a third straight session loss, after U.S. government data revealed an unexpected weekly climb in domestic crude supplies — the largest in a month.
Fears about waning demand in China also continue to weigh on prices.
Price action
-
West Texas Intermediate crude for December delivery
CLZ22,
-2.38% CL.1,
-2.38%
delivery fell $2.23, or 2.5%, to $88.68 a barrel on the New York Mercantile Exchange after falling 4% during the first two trading days of the week. -
January Brent crude
BRNF23,
-2.10%
the global benchmark, was down $2.03, or 2.1%, to $93.33 a barrel on ICE Futures Europe. - Back on Nymex, December gasoline RBZ22 fell 2.5% to $2.572 a gallon, while December heating oil HOZ22 lost 2.4% at $3.6822 a gallon.
- December natural gas NGZ22 dropped 6.4% to $5.747 per million British thermal units, extending its losses for the second day in a row.
Market drivers
Oil prices extended their early Wednesday declines after the Energy Information Administration reported that U.S. crude inventories rose by 3.9 million barrels for the week ended Nov. 4. That came on the heels of a 3.6 million-barrel weekly decline in the nation’s Strategic Petroleum Reserve, EIA data show.
The weekly rise for crude stockpiles was the largest since a 9.9 million-barrel increase the EIA reported for the week ended Oct. 7.
On average, analysts forecasted a decline of 700,000 barrels for crude inventories, according to a poll conducted by S&P Global Commodity Insights. The American Petroleum Institute reported on Tuesday a weekly rise of 5.6 million barrels in crude inventories, according to sources.
The EIA also showed weekly inventory declines of 900,000 barrels for gasoline and 500,000 barrels for distillates. The analyst survey had called for decreases of 1.2 million barrels for gasoline and 900,000 barrels for distillates.
Crude stocks at the Cushing, Okla., Nymex delivery hub fell by 1 million barrels for the week, the EIA said, while total domestic petroleum production climbed by 200,000 barrels per day to 12.1 million barrels a day.
In a separate monthly report issued Tuesday, the EIA raised its 2022 and 2023 forecasts for heating oil and diesel prices and noted that distillate supplies, which are primarily consumed as diesel and heating oil, finished the month of October at their lowest levels in any October since 1951.
Oil and gas prices have declined in recent sessions despite an OPEC+ output target cut that began in November and hopes for less restrictive COVID-19 measures in China. So far, Beijing has shown no signs of loosening COVID-related restrictions, which has weighed on energy prices, said Craig Erlam, senior market analyst at OANDA.
China’s consumer inflation eased in October, while factory-gate prices fell from a year ago for the first time in nearly two years, reflecting weakening domestic demand as the economy cooled further.
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