US crude futures plunge $1.88/bbl on high inventories

09 October 2013 20:29  [Source: ICIS news]

HOUSTON (ICIS)--NYMEX light sweet crude (WTI) for November delivery fell sharply on Wednesday, settling at $101.61/bbl, down $1.88, in response to the weekly supply statistics from the Energy Information Administration (EIA) showing a much greater-than-expected build in crude inventories.

The EIA data showed crude oil stocks rising by nearly 7m bbl during the previous week, the largest weekly build since September 2012. During the last three weeks, oil inventories have built by just under 15m bbl. The increase overshadowed the 14th consecutive drawdown at the NYMEX delivery hub in Cushing, Oklahoma.

Crude futures also responded to the US dollar firming against a basket of currencies, which makes dollar denominated commodities more expensive.

The continuing government shutdown and political stalemate in Washington, which could impact economic growth, provided underlying support.

November WTI hit an intra-day low of $101.18, down $2.31, before staging a rebound.

ICE Brent for November delivery established a low of $108.12/bbl and settled at $109.06/bbl, down $1.10.

By: Ignacio Sotolongo
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