WTI crude hits fresh 17-month low after bearish EIA report

Both West Texas Intermediate and Brent crude benchmarks fell to new multi-month lows on Wednesday after the Energy Information Administration reported a jump in both refined product categories, as well as a bigger-than-expected rise in crude supplies.

On the New York Mercantile Exchange, US November crude fell by 1.65% to $87.38 per barrel by 14:50 GMT, having dropped to $86.83 earlier in the session, the lowest since April 2013. The contract shed 1.65% on Tuesday to close at $88.85 a barrel.

On the ICE, Brent crude for delivery in the same month lost 1.29% to trade at $90.92 a barrel. Prices fell earlier to $90.57, the weakest level since June 2012. The contract slid almost 5% last week, the most since April 2013, marking its fourth weekly decline in five. Brent’s premium to its US counterpart narrowed to $3.18 from Tuesday’s close at $3.26.

The Energy Information Administration reported that US crude oil inventories expanded by 5.01 million barrels in the week ended October 3rd to 361.7 million. The reading was in line with a 5.1-million jump reported by the American Petroleum Institute on Tuesday and trailed analysts projections for a more moderate 2-million increase. Supplies at Cushing, Oklahoma, the biggest US storage hub and delivery point for NYMEX-traded contracts, slid to 18.9 million barrels from 20.5 million in the preceding period.

The government agency also reported that distillate fuel inventories, which include diesel and heating oil, rose by 439 000 barrels to 126.1 million, defying analysts forecasts for a 1.25-million drop. Gasoline stockpiles also rose, by 1.18 million barrels, to 209.7 million, mismatching expectations for a decline of 500 000 barrels.

Domestic crude production surged to 8.875 million barrels per day, the highest since 1986, up from 8.837 million bpd the previous week, while net imports increased to 7.29 million bpd from 6.86 million.

Refineries operated at 89.3% of their operable capacity, down from 89.8% a week earlier. Both gasoline and distillate fuel production decreased last week, averaging 8.9 million and 4.7 million barrels per day.