Oil slides 2 percent to three-week low on U.S. crude build

Wed Oct 21, 2015 5:42pm EDT
 
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By Barani Krishnan

NEW YORK (Reuters) - Oil prices fell about 2 percent to three-week lows on Wednesday as the U.S. government reported a bigger build than expected in crude stockpiles, although significant drawdowns in gasoline and distillates prevented a steeper slide in crude futures.

U.S. crude oil inventories rose 8 million barrels last week, the government-run Energy Information Administration (EIA) said.

The build was more than double the 3.9 million barrels forecast by analysts in a Reuters poll. It was also above the 7.1 million build reported by industry group American Petroleum Institute.

Oil prices extended losses briefly on the build, but came off their lows on a drop of 1.5 million barrels in gasoline stocks also reported by the EIA. Stocks of distillates, which include diesel, fell by 2.6 million barrels.

The drop in gasoline and distillate stocks came despite a pickup in refinery runs, which should have translated to more products.

The Reuters poll had forecast an inventory decline of 900,000 barrels for gasoline and 1.3 million for distillates.

"The products draw is providing a bullish tilt to the market," said Matt Smith, analyst at energy consultancy and database Clipperdata.

U.S. crude CLc1 settled down $1.09, or 2.4 percent, at $45.20 a barrel. It hit a three-week low of $44.86 earlier.   Continued...

 
A technician of Cuba's state-run CUPET works on an oil pump in Mayabeque province, Cuba, October 15, 2015. REUTERS/Enrique de la Osa