Oil prices extended losses on Wednesday after weekly inventory data showed an unexpected decline in U.S. crude stockpiles while an increase in stockpiles of petroleum products.
October West Texas Intermediate crude fell 82 cents, or 1.8 percent, to $44.08 a barrel on the New York Mercantile Exchange. November Brent fell 76 cents, or 1.6 percent, to $46.34 a barrel on ICE Futures Europe.
Both Brent and WTI rose after the Energy Information Administration report that crude inventories fell by 600,000 barrels during the week ended Sept. 9. Analysts and traders had expected the agency to report that crude stockpiles rose by 3.8 million barrels.
However, Stockpiles of gasoline and distillates, including heating oil and diesel fuel, rose by 4.6 million barrels in the week to Sept.9, the EIA said. The data surprised analysts. Analysts had projected an increased of 1.5 million barrels. That forced the Brent and WTI reverse gains.
“A build to gasoline stocks amid lower runs and lower product supplied counters the bullish theme, as does a strong build to distillates,” said Matthew Smith, analyst at New York-based crude cargo tracker Clipperdata. “So, it’s a mixed report – bullish crude and bearish products.”
Crude futures slumped on Tuesday after the International Energy Agency said global oil demand growth slowed in the third quarter and signal that the market will be oversupplied at least through the first half of 2017.
“Rather than talking about capping oil production as it was planning to do at the end of September, OPEC would be better advised to think about reversing the production growth of recent months,” Commerzbank analyst Carsten Fritsch said.