CEP: WTI Oil Drops Below $70 Following Inventories Report
(CEP News) - Crude oil prices in the U.S. are at their lowest point in over a year on Thursday after weekly Energy Information Administration (EIA) figures revealed a larger-than-expected build in oil supplies.
U.S. crude oil inventories increased by a much larger-than-expected margin, rising by 5,611k barrels in the week ending Oct. 10 against expectations of a build of 2,600k. West Texas Intermediate crude oil futures contracts fell a total of $3.13 per barrel to session lows of $69.16 on the 11 a.m. EDT release. This is the first time since Aug. 31, 2007 that WTI oil has dipped below the $70 mark. WTI crude oil is now down $4.46 to $70.06.
Meanwhile, Intercontinental Exchange (ICE) RBOB gasoline futures are down 16.05 cents per gallon to 162.17 cents after the report showed that gasoline supply increased by 6,973k barrels, above the Bloomberg estimate for an increase of 3,000k barrels.
Natural gas futures meanwhile jumped $0.145 mmbtu to session highs of $6.785 at 10:35 a.m. EDT when the EIA reported that underground natural gas storage in the United States increased by 79 billion cubic feet in the week ending Oct. 10. The increase was relatively in line with the Bloomberg estimate of +80 Bcf.
The weekly increase was virtually in line with the +80 Bcf Bloomberg estimate. In the week ending Oct. 3, the EIA had reported a supply increase of 88 Bcf.
CMC Markets analyst Colin Cieszynski acknowledged the gain of natural gas and believes they hold a special significance as the commodity continues to stay above $6.500 mmbtu.
"While this may be due to seasonal factors or a slightly better than expected inventory report, it also suggests that some commodities may have reached levels where selling pressure may start to ease and support may start to come in," he wrote in a research note.
In the mining sector, Chicago Board of Trade (CBOT) gold is trading down $47.10 per ounce to $803.60 USD. In Canadian dollars, gold is down $58.09 to C$950.30. Silver contracts at the CBOT are down $0.75 to $9.55. Bloomberg's index for base metals is down 5.70 points to 150.98.
