Oil Spirals Lower on Strong Supply

Oil Spirals Lower on Strong Supply

NEW YORK (DTN) -- New York Mercantile Exchange oil futures spiraled lower in midmorning trade after the Energy Information Administration issued weekly data showing a bigger-than-expected domestic crude stock build.

At 10:30 a.m. CDT, NYMEX November WTI futures fell $1.27 cents to $45.37 barrel, off a better than one-week spot low of $45.23. November ULSD futures dropped 2.89 cents to $1.4544 gallon, off a six-week spot low of $1.4492. November RBOB futures tumbled 3.06 cents to $1.2777 gallon, off a nine-month spot low at $1.2769.

The EIA's report for the week-ended Oct. 9 detailed a 7.6 million bbl increase in crude oil supplies, nearly six times the 1.3 million build the market expected but below the 9.348 million bbl rise reported late Wednesday by the American Petroleum Institute.

At the Cushing, Oklahoma, supply hub that also serves as the delivery point for West Texas Intermediate, crude stocks rose 1.1 million bbl versus an expected draw of 1.0 million bbl. API reported a 1.4 million bl increase at the key terminal.

For oil products, EIA also showed a 2.6 million bbl stock draw for gasoline, slightly more than an expected 2.5 million bbl decline but less than API's 5.0 million bbl draw.

EIA reported a 1.5 million bbl stock draw for distillates, exceeding expected 300,000 bbl decline, but below API's 2.7 million bbl draw.

On demand, EIA reported a small increase in demand for gasoline while distillates demand fell sharply, and implied crude demand posted a sizable decrease.

The new U.S. data adds to the excess global supply amid concerns the global economy is slowing down and could reduce demand.

George Orwel can be reached at george.orwel@telventdtn.com

(BAS)