US crude inventories drop by 8 million barrels

Crude oil prices were lower on Wednesday after the US Energy Information Administration reported that while crude oil inventories were lower last week, stockpiles of gasoline and inventories grew while refinery utilization remained the same at 89.4 percent of capacity.

While crude oil inventories dropped by 8 million barrels overall in the week ending 30 November, several times the expected 700,000 barrel drop, stockpiles at the key Cushing, Oklahoma depot were up by 700,000 barrels to ease worries of tight supplies.

Gasoline inventories were up by 4 million barrels in the week, 600,000 barrels higher than they were last year at the same time, while distillates in storage were up 1.4 million barrels to a total of 132.3 million barrels.

The price of crude oil spiked right after the inventories report was released, rising back above $90 per barrel for a time, and went up again after the announcement that OPEC has decided to keep production levels even for the time being.

However, signals that OPEC is already producing above official quota levels send prices lower.

West Texas Intermediate crude for January delivery ended the session at $87.49 per barrel, a decline of 83 cents over Tuesday’s close, while January contracts for Brent crude fell $1.07 to $88.46 per barrel on the ICE Futures Europe exchange in London.

Nymex January gasoline was down 3 cents to $2.22 per gallon while January heating oil fell 2 cents to $2.49 per gallon but January natural gas was 3 cents higher to $7.19 per million British thermal units.