Crude price slides below $100 a barrel

A delayed report from the US Energy Department showing rising domestic supplies has pushed the price of oil lower today.

Towards the end of the open outcry session in New York, US light crude oil futures for December were down 1.4% at $99.65.

The Energy Information Administration, the statistical arm of the Energy Department, had been forced to postpone the release of its normal weekly Petroleum Status report last week because of the ongoing partial government shutdown.

The report for the week ending 11 October was finally released this afternoon and showed US crude supplies increased by 4 million barrels. That takes US crude inventories to 374.5 million, its highest level in three months. The rise was greater than had been expected.

The autumn turnarounds of refineries, where oil refinery units are taking offline for scheduled maintenance following the US summer driving season and ahead of the winter heating season, has been causing a drop in utilisation rates and contributing to the expansion in US crude inventories; operating rates have dropped three times in the last four weeks. Utilisation was at 86.2% of capacity for the week ending 11 October, though, up 0.2% from the week before.

In the last few weeks we have seen the overall stockpile of oil increasing in the US, but the fundamental bearishness of this has been slightly mediated by supplies declining at Cushing, Oklahoma, the price settlement point for US light crude futures. But even that counterweight has been removed with this latest data, with an increase of 336,000 barrels reported at Cushing, the first rise there since June.

Inventory data for last week will be reported by the EIA on Wednesday.

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