WTI extends losses as U.S. crude inventories rise more than expected

West Texas Intermediate crude fell to the lowest since June on Wednesday after the Energy Information Administration reported that U.S. crude oil inventories rose for a fifth consecutive time last week, indicating easing demand in the worlds top consumer. Rising crude supplies in second biggest consumer China also fanned negative sentiment.

On the New York Mercantile Exchange, WTI crude for delivery in December fell by 1.84% to $96.49 per barrel at 14:57 GMT. Prices slumped to $96.18 minutes after the release of the data, the lowest since June 30, while days high stood at $98.28. The American benchmark shed 1.3% on Tuesday, a second consecutive daily retreat, and extended its weekly decline to 4.3% on Wednesday.

Meanwhile on the ICE, Brent futures for settlement in December traded at $108.59 per barrel at 14:56 GMT, down 1.26% on the day. Prices held in range between days high of $110.06 and low at $108.51 per barrel, the weakest level since October 9. The European benchmark added 0.2% on Tuesday but extended its weekly decline to over 1.2% on Wednesday.

Oil prices extended their retreat after the Energy Information Administration reported that U.S. crude oil inventories rose well above expectations in the week ended October 18. Crude reserves surged by 5.2 million barrels, exceeding the median estimate of analysts surveyed by Bloomberg for a 3 million increase. Total supplies now stood at 379.8 million barrels and were above the upper range for this time of the year. Refineries utilization fell to 85.9% from 86.2%, defying projections for an increase to 86.5%. U.S. crude oil imports fell by 348 000 barrels per day from a week earlier and averaged 7.7 million bpd.

The report also showed that gasoline production fell last week, while distillate fuel output increased, averaging 9.1 million and 4.8 million barrels per day, respectively. Total motor gasoline inventories fell by 1.8 million barrels and were near the top of the average range. Analysts expected a 1 million drop. Distillate fuel supplies rose by 1.5 million barrels, confounding projections for a 1.8 million drop, but remained near the lower limit of the average range for this time of the year.

Inventories at Cushing, Oklahoma, the biggest U.S. storage hub and delivery point for NYMEX-traded contracts, added 358 000 barrels to 33.3 million, a second consecutive increase.

A separate report by the industry-funded American Petroleum Institute showed yesterday that U.S. crude oil reserves rose by 3 million barrels last week, a fifth consecutive weekly gain. Motor gasoline supplies fell by 510 000 barrels last week, the organization reported, while distillate fuel inventories rose by 815 000 barrels. However, API’s statistics are considered as less reliable than those provided by the Energy Information Administration as they are based on voluntary information from operators of refineries, pipelines and bulk terminals.

Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors, said for Bloomberg: “Fundamentally, it’s a weak market for WTI. Everything points to lower prices. The Brent-WTI just massively widened up.”

The market was also pressured after official data showed that crude oil stockpiles in China, the worlds second-biggest consumer, surged to a record high in September. According to China Oil, Gas & Petrochemicals, commercially held supplies rose by 1.4% from the previous month to 237.6 million barrels, according to Bloomberg calculations.