Futures on US West Texas Intermediate Crude Oil extended losses from the prior trading sessions on Thursday, after an industry report revealed a substantial increase in US crude oil and gasoline stockpiles.
The most recent data by the American Petroleum Institute showed crude oil inventories had surged by 12.94 million barrels in the week ending on October 6th, after a 4.21 million barrel draw in the prior week.
It has been the largest crude oil stock build since the first week of January. Analysts on average had expected a much smaller increase – by 1.3 million barrels.
“Lower refinery run rates due to maintenance likely contributed to this build,” ING analysts wrote in an investor note.
Meanwhile, US gasoline inventories surged by 3.6 million barrels last week, while confounding market expectations of 800,000 barrel drop.
“Fuel prices may be closer to consumers’ pain threshold than inflation-adjusted prices might suggest. There are already signs that consumers have responded by cutting back on fuel consumption,” JPMorgan analysts wrote in a note, cited by Reuters.
“In PADD 5, of which California is the biggest consumer, we estimate gasoline demand dropped 100,000 barrels per day between June and September, to a seven-month low of 1.46 million barrels per day,” the analysts noted.
Additional downward pressure on oil prices came on easing concerns over supply in the Middle East, as the impact of the Israel-Hamas conflict on the market will likely be limited.
WTI Crude Oil Futures for November delivery were last losing 0.63% to trade at $82.96 per barrel.
At the same time, Brent Oil Futures for December delivery were retreating 0.50% on the day to trade at $85.92 per barrel.
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