WTI futures extend decline following bearish EIA inventory data

West Texas Intermediate crude erased its daily gains after data by the Energy Information Administration showed that US crude oil inventories rose more than twice than expected, while US crude oil production remained near the highest in almost three decades. Brent pared daily gains.

US December crude traded 0.72% lower at $81.90 a barrel at 14:42 GMT, having shifted in a daily range of $83.15-$81.61. The American crude benchmark gained 0.71% on Tuesday, reversing Monday’s 0.2% loss, to settle at $82.49, the highest in a week.

Meanwhile on the ICE, Brent for delivery in the same month stood mostly unchanged at $86.23 a barrel, having ranged between $87.07 and $85.97 during the day. The contract rose almost 1% on Tuesday to $86.22, drifting further away from Thursday’s four-year low of $82.93. Brent was at a premium of $4.33 to its US counterpart, up from Tuesday’s close at $3.73.

WTI reversed its daily movement after the EIA reported that US crude oil inventories jumped by 7.11 million barrels to 377.7 million in the week ended October 17th, exceeding analysts projections for 3-million increase. Supplies at Cushing, Oklahoma, the biggest US storage hub and delivery point for NYMEX-traded contracts, rose to 20.6 million barrels from 19.6 million a week earlier.

The larger-than-projected build came amid a typical for the maintenance period lower utilization rate, while domestic crude production stood near the highest in almost three decades.

Refineries operated at 86.7% of their operable capacity, down from 88.1% a week earlier, while US crude output was at 8.934 million barrels per day, close to last weeks 8.951 million bpd, which was the highest since June 1985.

Imports fell by 263 000 barrels per day to 7.477 million bpd, while the four-week average of imports slid to 7.553 million bpd, down 5.8% from a year earlier. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 438 000 barrels per day, while distillate fuel imports averaged 89 000 bpd.

The report also showed that total motor gasoline supplies fell by 1.3 million barrels to 204.4 million, largely in line with analysts projections. Distillate fuel stockpiles, which include diesel and heating oil, rose by 1.05 million barrels to 125.7 million, confounding projections for a 1.5-million drop.