Oil Falls as US Stock Expands More than Anticipated

West Texas Intermediate crude fell after an Energy Information Administration report showed U.S. inventories increased more than forecast last week.

Stockpiles climbed 7.11 million barrels in the week ended Oct. 17, the EIA said in a weekly report. Analysts surveyed by Bloomberg had expected a gain of 3 million. Refiners operated at the lowest level since March. Brent widened its premium over WTI as Libya called for a production cut from OPEC.

“It’s definitely a surprise and a bearish report,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “The further decline in the utilization rate obviously causes crude oil inventory to back up.”

WTI for December delivery slid 71 cents, or 0.9 percent, to $81.78 a barrel at 12:11 p.m. on the New York Mercantile Exchange. The November contract expired yesterday. The volume of all futures traded was about 2.4 percent below the 100-day average for the time of day.

Brent for December settlement gained 7 cents to $86.29 a barrel on the London-based ICE Futures Europe exchange. Volume was 12 percent below the 100-day average. The European benchmark crude was at a premium of $4.39 to WTI on ICE, compared with $3.73 yesterday.

Crude inventories increased to 377.7 million barrels last week, the highest since July, according to the EIA. Supply has grown about 21 million barrels in the past three weeks. Stockpiles at Cushing, Oklahoma, the delivery point for WTI futures, rose to 20.6 million.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza