Crude prices decline after WTI sets new record

The rally in crude oil prices finally slowed on Wednesday as West Texas Intermediate crude for November delivery dropped 33 cents to $87.28 per barrel at the end of floor trade on the New York Mercantile Exchange and Brent crude dropped 51 cents to $83.04 per barrel on the Intercontinental Exchange in London.

However, the declines didn’t come until after WTI peaked at a new record of $89 per barrel earlier in the session on the news that the Turkish Parliament had approved a measure to allow Turkish troops to cross the border with Iraq to fight the Kurds there.

The motion allows Turkey’s Prime Minister to authorize “one or more” military ventures into Iraq in the next year, although the government said that any moves into Iraq will not come immediately.

The Kurdish-controlled region of Iraq is home to significant oil reserves.

The news from Turkey served to minimize the US Energy Information Administration’s weekly inventories report, which showed that crude oil stockpiles were up by 1.8 million barrels in the week ending 12 October, while gasoline inventories grew by 2.8 million barrels and distillates in storage grew by 1 million barrels.

The gains in gasoline and distillates stockpiles came even though the EIA reported that refinery usage dropped by 0.5 percent to 87.3 percent of capacity.

Nymex gasoline for November delivery was 3 cents lower to $2.15 per gallon, while December heating oil fell 2 cents to $2.34 per gallon.

January natural gas added 17 cents to $8.45 per million British thermal units.