Oil Futures End Sharply Lower

NEW YORK (DTN) -- New York Mercantile Exchange oil futures plummeted on extended selling pressure after the Energy Information Administration reported an eye-popping 14.4 million bbl stock build for domestic crude oil inventories and weaker demand for both crude and middle distillate fuels.

The EIA's report for the week-ended Oct. 28 showed the crude stock build pushed total stocks to 482.6 million bbl, leaving supplies 7.1% higher than a year ago.

It was accompanied by a nearly 2.0 million bpd increase in crude imports, an 18,000 bpd rise in domestic crude production to 8.522 million bpd, while refinery crude inputs, a proxy for crude demand, fell 104,000 bpd for the week.

"Total U.S. petroleum demand slipped below 20 million bpd," said Kyle Cooper, an analyst at IAF Advisors. "On the bullish side, gasoline exports are still very strong but lower than last week while distillate exports rose above 1 million bpd. Still [this is] an overall bearish report."

The EIA also said gasoline supplies fell 2.2 million bbl and distillate fuel inventories were down 1.8 million bbl, with implied demand down 303,000 bpd for distillates while gasoline demand rose 65,000 bpd.

Internationally, Nigerian oil production has recovered to 2.1 million bpd while Libya has doubled its production since mid-September to a reported 590,000 bpd, according to wire reports.

NYMEX December West Texas Intermediate crude oil futures settled $1.33 lower at $45.34 bbl, edging off a $44.96 fresh one-month spot low. The ICE January Brent futures contract settled $1.28 lower at $46.86 bbl, trimming a decline to a fresh one-month spot low of $46.46.

NYMEX December ULSD futures tumbled 5.04cts to $1.4665 gallon, paring a drop to a $1.4516 fresh one-month spot low, while December RBOB futures settled 3.62cts lower at $1.4479 gallon.

On Wall Street, equities were lower while the dollar fell to a three-week low this afternoon after the Federal Open Market Committee left short-term interest rates unchanged, but said the case for a rate hike has strengthened since the first half of the year.

The FOMC said labor market conditions have improved along with consumer spending and the overall economy, hinting that a December rate hike is a possibility.

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