Oil prices tumbled Wednesday following a government report that showed a sharp increase in U.S. fuel inventories.
Light, sweet crude for January delivery gave up $1.25, or 1.4%, at $87.45 U.S. a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange lost $1.15, or 1.3%, at $90.24 U.S. a barrel.
Prices of fuel products fell even more sharply. January reformulated gasoline blendstock, or RBOB, fell 3.21 cents, or 1.4%, to $2.2910 U.S. a gallon. January heating oil gave up 2.63 cents, or 1.1%, at $2.4439 U.S. a gallon.
The Department of Energy reported a bigger-than-expected rise in stockpiles of gasoline and distillates, a category that includes heating oil and diesel. Gasoline inventories jumped by 3.8 million barrels during the week ended Dec. 3. Distillate stocks rose 2.2 million barrels.
Traders appeared to shrug off a decline in crude inventories, focusing instead on products. Crude stocks fell 3.8 million barrels last week, the DOE said, typically a bullish sign for oil prices. Refinery use rose 4.9 percentage points to 87.5%.
Analysts surveyed by Dow Jones Newswires expected gasoline stockpiles to rise 100,000 barrels. They saw distillate stocks falling 600,000 barrels, while crude inventories were seen falling 1.2 million barrels. Refinery runs were expected to rise 0.9 percentage points.
The American Petroleum Institute offered a mixed picture of energy stocks in its own survey released late Tuesday. The industry group said crude stocks plunged 7.338 million barrels last week, while gasoline inventories jumped 4.795 million barrels and distillate stocks climbed 1.744 million barrels.
Attention will turn later in the week to a scheduled meeting of the Organization of Petroleum Exporting Countries in Ecuador. While no major announcements on quota adjustments are expected, market participants will be closely parsing any communication from the group, which accounts for about one-third of global oil production.
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