West Texas Intermediate crude (NYMEX:CLX13) fell to a 12-week low as inventories unexpectedly rose last week and demand slipped.
Prices slid for a fifth day after the Energy Information Administration reported stockpiles increased 2.64 million barrels. Analysts had forecast a 1 million-barrel decrease. Gasoline consumption declined 2% to 8.85 million barrels a day. WTI also followed losses in equities on concern that lawmakers won’t reach a deal to avoid a government shutdown.
“The build in crude is surprising and demand is coming down,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. “It’s a very bearish report. I wouldn’t be surprised to see prices get down to $100 by the end of the week.”
WTI crude for November delivery slipped 47 cents, or 0.5%, to $102.66 a barrel on the New York Mercantile Exchange, the lowest settlement since July 3. Futures have retreated 5% in the past five days, the longest run of declines since Dec. 10. The volume of all futures traded was 13% below the 100-day average at 3:37 p.m. Prices are up 6.3% this quarter and 12% in 2013.
Brent for November settlement fell 32 cents, or 0.3%, to $108.32 a barrel on the London-based ICE Futures Europe exchange. Volume was 25% above the 100-day average. The European benchmark’s premium to WTI grew 15 cents to $5.66, the widest level since Sept. 5.
Crude supplies climbed for the first time in four weeks, according to data from the EIA, the Energy Department’s statistical arm. They rebounded to 358.3 million barrels from 355.6 million the prior week, the least since March 2012.
Total petroleum demand fell 2.8% to 19.3 million barrels a day. Refineries reduced their utilization rate to 90.3%, the lowest level since Aug. 9.
“The big story is the big drop in refinery utilization,” said Jacob Correll, a Louisville, Kentucky-based commodity analyst at energy management firm Schneider Electric Professional Services. “If utilization had been higher, we would have seen big draws.”
Crude inventories at Cushing, Oklahoma, WTI’s delivery point, slipped 412,000 barrels to 32.8 million on Sept. 20, the lowest level since February 2012, the report showed. Supplies have tumbled 34% since June 28 and dropped for 12 weeks.