Oil prices drop on rise in US stockpiles


Oil prices slid on Wednesday after data showed a bigger than expected increase in energy stockpiles in the United States, indicating weak demand in the world’s biggest economy.
New York’s main contract, West Texas Intermediate (WTI) for delivery in November, slid $3.24 to close $81.21 a barrel.
In London, Brent North Sea crude for November dropped $3.33 to settle at $103.81 a barrel.
Prices had surged by more than $4 a barrel in New York on Tuesday, mirroring huge gains on world equity markets, as investors hoped that European governments would contain the eurozone debt crisis, in turn helping support demand for oil.
But they reversed direction on Wednesday as the US Department of Energy said crude oil stockpiles rose by 1.9 million barrels last week in the United States.
Analysts polled by Dow Jones Newswires had forecast an increase of 700,000 barrels.
“The crude oil build-up was fairly large, and gasoline as well,” said John Kilduff of Again Capital.
“But more importantly, the four-week average demand numbers were down significantly and I think it speaks of the state of the economy right now and the diminished prospects for it,” he added.
A Natixis analysis tied the crude stockpile increase to a rise in oil imports, “some of which would have been caused by hurricane-related delays over recent weeks.”
Natixis also noted that refinery utilization rates had fallen by 0.5 percentage point.

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