USA crude stocks surged sharply for a second week, climbing 8-million barrels in the week to October 16, data from the US Department of Energy’s Energy Information Administration showed on Wednesday. Brent crude, a global benchmark, has slumped 42 percent over the previous year trading below $50 per barrel on Monday. USA crude futures for December delivery were down 65 cents to $45.64 a barrel.
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The gains came despite mixed news on USA inventories, underscoring how used to bad news the crude market has become.
China’s implied oil demand fell slightly in September to 10.13 million bpd, down 0.1 percent from a year ago, according to Reuters calculations based on preliminary government data.
US crude for November delivery was down 5 cents at $47.21 after finishing the previous session 7 cents up.
With the large increase, USA stockpiles grew by 22 million barrels in the last four weeks. The U.S. front futures contract was due to expire later on Tuesday.
“Any number should be supportive of oil prices and a reason for prices to hold up”, Barratt said.
But the big move overnight was after the EIA reported a whopping build in United States oil stockpiles. “The bottom line is what’s happening in products is more of a function of better cash markets, not a change in fundamentals”, said Scott Shelton, energy broker and commodities specialist at ICAP. A senior Iranian oil official also said the OPEC member will boost production by 500,000 barrels a day within one week of the sanctions being lifted.
A meeting of oil exports from OPEC and non-member countries ended on Wednesday without any concrete price support measures despite discussing the risk low oil prices would have on investment in new supplies. However, few in the market expect any meaningful action as big producing nations have enacted a policy of pumping crude at a rapid pace in a bid to defend their market share.
“Russia and other countries don’t show any indication to decrease supply, which is crucially needed to balance the still oversupplied oil market”, said Ole Hansen, head of commodity strategy at Saxo Bank. Within six months, the exports could increase up to 1 million barrels per day.
At 1452 BST on the Comex, gold fell 0.63%, silver dropped 1.36% but spot platinum was up 0.30%.
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Margarita Papchenkova contributed to this article.
