Oil Gas Energy

The front-month November light, sweet crude contract on the New York Mercantile

Exchange was recently down 40 cents, or 0.5%, at $79.13 a barrel after rising as high as $80.75 before the data. Brent crude on the ICE futures exchange fell 83 cents to $76.79 a barrel.

Crude oil stockpiles rose 1.8 million barrels to 320.6 million barrels last week, the DOE’s Energy Information Administration unit said in its weekly report. The average forecast in an earlier Dow Jones Newswires survey of analysts was for a draw of 1.8 million barrels.

"Prices are coming off on the build in crude stockpiles," which did the exact opposite of analysts’ forecasts, said Michael Cambria of PNDR Energy on the Nymex floor.

Gasoline stocks grew by 600,000 barrels to 191.4 million barrels, compared with expectations for a 200,000 barrel build, and distillates, which include heating oil and diesel fuel, grew by 1.6 million barrels, more than the 1.1 million barrels expected. Refinery use fell by 2.7 percentage points to 86.9% of capacity, a bigger drop than the expected fall of 0.6 percentage point.

Front-month October reformulated gasoline blendstock, or RBOB, fell 3.29 cents, or 1.6%, to $2.005 a gallon. October heating oil was down 1.74 cents, or 0.8%, at $2.1639 a gallon.

The unexpected build in stockpiles could be a turning point for crude oil prices, which hit a record $83.90 on Sept. 20. Prices have dropped for the previous three sessions, after a strong run-up helped by fund buying, and analysts had been saying this week’s inventory report would be key to deciding crude’s future direction.

"The $80 barrier may be difficult to overcome, the momentum has shifted to downside," said Mike Zarembski, an analyst at OptionsXpress in Chicago.

Source:

http://www.rigzone.com/news/article.asp?a_id=50712