Oil down 3 percent again; product builds offset U.S. crude draw
By Barani Krishnan
NEW YORK (Reuters) - Oil prices fell about 3 percent for a second straight day on Wednesday, after data showing large weekly builds in U.S. petroleum products offset a surprise draw in crude stockpiles.
U.S. inventories of distillates, which include diesel and heating oil, rose by 4.6 million barrels in the week to Sept. 9, the U.S. Energy Information Administration reported. Analysts had expected an increase of 1.5 million barrels. It was the biggest weekly build since January, putting distillates at six-year seasonal highs.
Gasoline stockpiles also rose more than expected, but crude inventories fell by 559,000 barrels. Analysts had expected a crude build of 3.8 million barrels. [EIA/S]
"A build to gasoline stocks amid lower runs and lower product supplies counters the bullish theme, as does a strong build to distillates," said Matthew Smith, analyst at New York-based crude cargo tracker Clipperdata.
Brent crude futures settled down $1.25, or 2.7 percent, at $45.85 per barrel.
U.S. West Texas Intermediate (WTI) crude futures slid $1.32 cents, or 2.9 percent, to settle at $43.58.
Many analysts were mystified by the weekly draw in crude. It followed an unexpected decline of 14.5 million barrels the previous week, the biggest draw in 15 years, due to Tropical Storm Hermine delaying oil arrivals into the U.S. Gulf Coast.
"So, the million-dollar question is really a 14.5 million barrel question ... as in where did all those barrels go to? The market was expecting some sort of a 'make up call' after last week's storm affected mega-draw," said David Thompson, executive vice president at commodities-focused broker Powerhouse in Washington. Continued...