By Dow Jones Business News, October 09, 2013, 04:03:00 PM EDT
--Nymex crude lowest since July 3 amid weak refiner crude demand
--EIA reports 6.8 million-barrel rise in crude stocks, biggest gain in 13 months
--Refiner crude runs drop 3.6% in week; lowest since April
(Adds Brent crude oil settlement and price premium details in fourth paragraph.)
By David Bird
NEW YORK--Crude-oil futures ended at a 14-week low on Wednesday after government data showed inventories climbed much
more than expected as refiners sharply reduced operations due to operational snags and seasonal maintenance.
Crude oil stocks rose 6.8 million barrels last week, the biggest weekly rise since mid-September 2012, the Energy
Information Administration said. At 370.5 million barrels, inventories are the highest in three months and 6.7% above
the five-year average for the week. That is the biggest surplus to the five-year average since mid-July.
Light, sweet crude for November delivery on the New York Mercantile Exchange settled 1.8%, or $1.88, lower at $101.61
a barrel, the lowest price since July 3. The drop was the biggest in dollar and percentage terms since Sept. 10.
ICE North Sea Brent crude oil settled $1.10 lower, at $109.06 a barrel. Brent's premium to the Nymex contract widened
to a $7.45 a barrel from $6.67 a barrel a day earlier and was the biggest in seven weeks.
"We knew turnaround season was coming, but the surprise is that we are down this much this week," said Andrew Lebow,
senior vice president at Jefferies Bache LLC in New York, referring to the downturn in refinery operations.
The rise in crude-oil stocks far exceeded analysts' expectations for a 1.4 million-barrel increase and the 2.8
million-barrel rise reported Tuesday by the American Petroleum Institute, a trade group, in its report for the week
ended Oct. 4.
Refineries across the nation reduced crude oil processing, with runs falling 3.6% last week to the lowest level since
April. Refiners used just 86% of capacity, down three percentage points from a week earlier, while forecasters expected
a slim 0.8-point decline.
"We seem to be tipping the scales back toward another test of $100 a barrel," said Gene McGillian, a broker and
analyst at Tradition Energy in Stamford, Conn. He said prices could hit that level, last seen at the start of July, if
the uncertainty continues over measures to address the ongoing the government shutdown and the debt-ceiling deadline.
Mr. McGillian said the minutes of the Federal Reserve's last policy board meeting, released Wednesday, may be of
comfort to market bulls as they showed many board members to be wary of cutting back on the government's massive
stimulus program, which has helped underpin oil prices.
Despite the nationwide rise, crude oil stocks at Cushing, Okla., dropped by a modest 168,000 barrels last week.
Declines at Cushing, the delivery point for the Nymex contract, often are supportive for prices, but analysts said the
bearish overall outlook for crude prevailed. Cushing stocks have dropped by 17 million barrels, or 34.3%, over the past
14 weeks as refiners increased shipments of crude from the region to Gulf Coast refineries. The 14-week string of
declines is the longest on EIA records beginning in 2004.
Stocks of distillate fuel (diesel and heating oil) fell 3.1 million barrels in the week, the EIA data show, far more
than the expected 1.2 million-barrel decline expected. Still, in the northeast U.S., the nation's biggest heating-oil
market, inventories of ultra-low sulfur diesel are 77% higher than usually low year-earlier levels. Gasoline stocks rose
by 149,000 barrels, less than expected, the EIA said.
Reformulated gasoline blendstock futures for November delivery settled 0.76 cent lower, at $2.623 a gallon, while
November heating oil futures settled 1.51 cents lower, at $3.0174 a gallon.
More information on settlements and highs and lows for futures on Nymex and ICE platforms can be found by searching
for the following headlines:
Nymex Light Crude Oil Close
Nymex Harbor RBOB Gasoline Close
Nymex Heating Oil Close
ICE Brent Crude Oil Close
ICE Gas Oil Close
Write to David Bird at firstname.lastname@example.org
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