Crude sinks after surprise build in oil supplies

The price of US light crude oil has fallen for the fifth trading session in a row following the release of a report from the Energy Department that shows easing demand and rising inventories.

By mid-afternoon in New York, WTI crude oil futures for November had fallen 0.56% to $10.255 a barrel, the latest in a long sequence of declines in the price of the commodity.

The fall came after the Energy Information Administration published its weekly Petroleum Status report which showed US crude oil inventories increased by 2.64 million barrels last week, more than twice the size that had been expected by analysts polled by Reuters.

The trend in recent weeks has been for dwindling supplies, with this being the first rise in four weeks. Supplies at Cushing, Oklahoma continue to fall though, decreasing by 412,000 barrels to 32.8 million barrels, the lowest level since February this year.

The report also revealed that petrol consumption decreased 2% last week to 8.85 million barrels a day. Refineries have left it later in the season than we would normally expect to start winding down their rates of operation, with increases in capacity seen for the first couple of weeks in September, but utilisation shrunk to 90.3% last week, the smallest capacity utilisation seen since 9 August.

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