Oil prices slumped toward their lowest levels since late August as the U.S. government on Thursday reported a seventh consecutive weekly increase in crude supplies.
Analysts are mostly downbeat about the outlook for oil prices, given ongoing worries about a glut of crude supplies.
December West Texas Intermediate crude dropped 95 cents, or 2.2%, to trade at $41.98 U.S. a barrel on the New York Mercantile Exchange, poised for its lowest settlement since late August. December Brent crude on London’s ICE Futures exchange fell $1.19, or 2.6%, to $44.62 U.S. a barrel.
The U.S. Energy Information Administration on Thursday reported an increase of 4.2 million barrels in crude supplies for the week ended Nov. 6. That was less than the 6.3-million-barrel rise reported by the American Petroleum Institute on Tuesday but far more than the 1.1-million-barrel increase expected by analysts polled by The Wall Street Journal. Companies are required to report data to the EIA, while reporting to the API is voluntary.
WTI prices had pared some losses in the immediate wake of supply data, after trading at the bottom of its range earlier Tuesday. Macaluso said it is "very feasible that we see a bounce from the bottom of the range. However, if oil settles beneath the $41.50 U.S. level, a [fall under $40 a barrel] is a mere arms reach away."
The government report also showed that total oil production rose by 25,000 barrels to 9.185 million barrels a day.
Among the products, gasoline supplies fell by 2.1 million barrels, while distillate stockpiles rose 400,000 barrels last week, the EIA said.
On Nymex, December gasoline dropped 5.1 cents, or 3.8%, to $1.279 a gallon and December heating oil fell 3.5 cents, or 2.4%, to $1.413 U.S. a gallon.
December natural gas traded at $2.277 U.S. per million British thermal units, up 1.4 cents, or 0.6%. The EIA’s weekly update on natural-gas supplies will be released on Friday, a day late because of Wednesday’s holiday.
