Oil Prices Settle Nearly 3% Lower Due to Sudden Increase in Gasoline Inventories in U.S.

December 7, 2017

Oil prices fell almost 3% on Wednesday, after a sharp increase in U.S. refined fuel inventories indicated a potential drop in demand, while U.S. oil production hit a new record high.

U.S. crude fell $1.66 or 2.9% to settle at $55.96 a barrel, closing at its lowest level since November 16^th, which is also the biggest one-day loss for U.S. crude since October 6^th.

Brent crude recorded a loss of $1.64 or 2.6%, to trade at $ 61.22 a barrel, its lowest close since November 2^nd.

Data from the Energy Information Agency (EIA) reported a drop of 5.6 million barrels in crude oil inventories last week, but inventories of both gasoline and distillates rose by 6.8 million and 1.7 million barrels respectively. Both gains exceeded the expectations of a number of analysts surveyed in a Reuters poll.

The data also showed that U.S. oil production rose to 9.7 million barrels per day, a new weekly record, although below record highs made in the 70s.