Oil tumbled to a six-week low after U.S. crude inventories surged the most since March as production and imports rebounded from Hurricane Isaac.
Futures decreased 3.5 percent after the Energy Department said supplies rose 8.53 million barrels last week, more than eight times what was projected in a Bloomberg survey. Imports arrived at the highest rate since January and output increased. Crude fell before the report on speculation Saudi Arabia is moving to reduce prices.
“This is a massive build in supplies,” said Stephen Schork, president of the Schork Group Inc. in Villanova, Pennsylvania. “We were already moving lower because of the Saudi headlines and this number is adding to the bearish sentiment.”
Crude oil for October delivery declined $3.31 to $91.98 a barrel on the New York Mercantile Exchange, the lowest settlement since Aug. 3. It was the biggest drop since July 23. Futures are down 6.9 percent this year.
Brent oil for November settlement fell $4.01, or 3.6 percent, to $108.02 a barrel on the London-based ICE Futures Europe. The contract touched $107.40, the lowest level since Aug. 3. Brent, a benchmark for more than half of the world’s oil, has risen from $89.23 on June 21, which was the lowest settlement since December 2010.
Crude oil inventories rose to 367.6 million barrels, a six- week high. Analysts surveyed by Bloomberg predicted an advance of 1 million. Imports of crude oil climbed 15 percent to 9.85 million barrels a day. Production advanced 14 percent to 6.28 million barrels last week.
Stockpiles of gasoline and distillate fuel, a category that includes heating oil and diesel, declined. Refinery operating rates rose to 88.9 percent from the previous week’s 84.7 percent as plants restarted units idled during the hurricane.
Isaac hit Louisiana as a Category 1 hurricane in late August. The storm’s path through Gulf of Mexico energy rigs and platforms closed as much as 95 percent of the region’s oil production, according to the U.S. Bureau of Safety and Environmental Enforcement.
Total fuel use decreased 0.6 percent to 18.6 million barrels a day in the four weeks ended Sept. 14, the lowest level since the week ended June 1. Gasoline consumption dropped 1.2 percent to 8.89 million barrels a day during the same period.