Why Are Oil Prices Falling?
U.S. crude inventories rose significantly more than expected last week, according data released Wednesday by the Department of Energy. Crude oil stockpiles rose 4.2 million barrels to 344.9 million, compared to an average survey estimate of an 800,000-barrel increase. Oil futures immediately fell on the report, trading 7 cents lower at $106.48 a barrel on the New York Mercantile Exchange.
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Meanwhile, gasoline stockpiles fell 1.6 million barrels to 229.9 million, according to the department’s Energy Information Administration, compared with a 100,000-barrel increase forecast in the Dow Jones Newswires survey of analysts. Gas futures were recently 2.43 cents higher at $3.0644 a gallon.
Distillate stocks, which include heating oil and diesel fuel, fell 2.1 million barrels to 141.4 million, compared with forecasts for a 600,000-barrel decline. Heating oil futures were recently up 0.42 cents to $3.2280 a gallon.
The American Petroleum Institute has reported stockpiles of gasoline fell by 900,000 barrels and distillates fell by 3.3 million barrels. In a report on Tuesday, the industry group had also reported a 500,000-barrel increase in crude stockpiles.
Refining capacity utilization was down 1.9 percentage points to 83.6 percent last week, when analysts had expected an increase of 0.1 percentage point, according to the Department of Energy report. API reported earlier this week that refinery utilization fell to 84.4 percent last week, from 86.6 percent the week earlier.
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