Crude oil prices drop on gains in US stockpiles

Crude oil prices were lower Wednesday after US inventories were reported to have grown more than expected last week.

The US Energy Information Administration said, in its weekly report, that crude oil inventories added 4.3 million barrels last week while gasoline stockpiles, which were expected to drop by as much as 3 million barrels in the week ending 26 September, added 900,000 barrels instead.

Distillates in storage were down 2.3 million barrels last week.

The increases for crude oil and gasoline inventories were attributed to the resumption of some operations in the Gulf of Mexico and along the Gulf Coast that had been closed due to recent hurricanes in the region.

Additionally, refinery utilization jumped by 5.6 percent last week to 72.3 percent of capacity.

November contracts for West Texas Intermediate crude dropped $2.22 to $98.42 per barrel on the New York Mercantile Exchange, while Brent crude for November delivery fell $2.97 to $95.20 per barrel on the ICE Futures Europe exchange in London.

At-the-pump prices for regular unleaded gasoline in the United States dropped 1.4 cents overnight to $3.62 per gallon on average nationally.

Demand is down not only in the United States, where gasoline demand was down 4.5 percent over the past 4 weeks when compared to the same period last year, but in Asia as well, where Japanese demand was down 8.4 percent in August and India has also seen declines.