Oil futures dipped below $100 a barrel in morning trading Wednesday after a weekly U.S. oil inventory report painted an overall bearish picture, counter to expectations.
Light, sweet crude for January delivery fell as much as $1.61, or 1.5%, to $99.67 U.S. a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange was down $1.55, or 1.4%, to $109.26 U.S. a barrel.
Weekly oil inventory data released by the U.S. Energy Information Administration at 10:30 a.m. EST Wednesday showed crude stocks rose 1.336 million barrels, to 336.083 million barrels. The result ran counter to expectations. Analysts had been expecting a decline of 900,000 barrels, and the American Petroleum Institute, an industry group, said stocks fell five million barrels in its own announcement late Tuesday.
Gasoline stocks rose 5.147 million barrels, compared to an expected rise of 600,000 barrels.
Distillate stocks rose 2.533 million barrels, compared to an expected rise of one million barrels.
Refinery runs rose 3.1 percentage points, to 87.7% of operating capacity, compared with an expected rise of 0.6 percentage points.
Meanwhile, worries about euro-zone debt troubles also continued to weigh on the market. European Union leaders are holding a summit Thursday and Friday to discuss ways for the euro-zone to bolster fiscal discipline, but expectations for a comprehensive solution were damped by anonymous remarks from a German official saying the country was not optimistic the meeting would be successful.
Euro-zone debt worries have weighed on the oil market for months, as traders fear the crisis could trigger an economic downturn that would curb demand for crude. Oil was dropping in tandem with stocks and a rise in the dollar against a basket of other currencies in the ICE Dollar Index. Oil falls as the dollar rises, as the commodity becomes more expensive for traders using other currencies.
Front-month January reformulated gasoline blendstock, or RBOB, lost 4.95 cents, or 1.9%, to $2.5959 U.S. a gallon. January heating oil was down 2.69 cents, or 0.9%, to $2.9948 U.S. a gallon.
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