Futures Movers: Oil prices decline as U.S. crude supplies mark a 2-week climb of more than 17 million barrels

Oil futures declined on Wednesday, headed for their first loss in five sessions, as U.S. government data revealed a more than 17 million-barrel climb in U.S. commercial inventories over the past two weeks.

Price action

  • West Texas Intermediate crude
    for December delivery

    fell $1.25, or 1.6%, to $77.01 a barrel on the New York Mercantile Exchange.

  • January Brent crude

    the global benchmark, declined 87 cents, or 1.1%, to $81.60 a barrel on ICE Futures Europe.

  • December gasoline
    declined by 0.9% to $2.035 a gallon, while December heating oil added 0.1% to $2.8412 a gallon.

  • Natural gas for December delivery
    traded at $3.216 per million British thermal units, up 3.5%

Market drivers

The Energy Information Administration on Wednesday released two weeks of U.S. petroleum supply data, after having delayed last weeks’ numbers due to planned system updates.

The government agency reported that U.S. commercial crude inventories rose by 3.6 million barrels for the week ended Nov. 10 to total 439.4 million barrels.

Using the commercial crude supply totals it provided in its data, supplies had climbed from 421.9 million barrels in the week ended Oct. 27 to 435.8 million barrels in the week ended Nov. 3 — showing an increase of 13.9 million barrels. Added to the latest week’s rise, commercial crude supplies rose by 17.5 million barrels over the two-week period ended Nov. 10.

On average, analysts polled by S&P Global Commodity Insights expected the report to show an increase of 4.5 million barrels for the two weeks ended Nov. 10.

For the week ended Nov. 10, the EIA report also revealed supply declines of 1.5 million barrels to 215.7 million barrels for gasoline and 1.4 million to 106.6 million barrels for distillates.

Crude stocks at the Cushing, Okla., Nymex delivery hub fell by 1.9 million barrels last week, the EIA said, and domestic petroleum production remained unchanged at 13.2 million barrels a day.

The EIA has also said it’s made changes to the way it collects some of its data.

In this case, however, Troy Vincent, senior market analyst at DTN, doesn’t believe that the crude-supply changes had anything to do with those adjustments.

The big build is in line with what the American Petroleum Institute reported for the week ended Nov. 3. The trade group reported on Nov. 7 that domestic commercial crude supplies for the week ended Nov. 3 climbed by 11.9 million barrels, according to sources.

The supply gain “simply reflects rising imports amid a very deep refinery maintenance season,” said Vincent.

WTI crude-oil futures had been trading lower ahead of the inventory data as investors digested a “terrible” New York Empire State Manufacturing release, said Tyler Richey, co-editor at Sevens Report Research.

The economic data “poured some cold water on soft economic landing hopes, while the ongoing conflict between Israel and Hamas has yet to have a meaningful impact on the global oil markets,” he told MarketWatch.

“As such, the fear-bid in oil has been slowly but steadily unwinding over the last month,” he said.

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