Crude At 3-Month Low On Higher Stockpiles, Lower Demand

Crude oil is attempting to recover some of the losses after hitting earlier in the day the lowest since the July as the US Energy Information Administration (EIA) report showed on Wednesday crude inventories unexpectedly rose last week as demand slipped.

The EIA report shows crude stockpiles increased by 2.64 million barrels to 358.3 million barrels, compared with a 1 million-barrel decrease expected, as demand fell 2.8% to 19.3 million barrels a day, while gasoline consumption declined 2% to 8.85 million barrels a day.

“The oil price is drifting back down, which again indicates that supply is adequate and demand is muted. But we’re not seeing crude prices below $100 yet”, said David Lennox from Fat Prophets, Sydney.

- Crude is trading around $102.58 a barrel after falling $0.08

- Brent is trading around $108.30 a barrel after falling $0.03

While the rebound in supplies from Iraq and Libya is weighing on prices, the uncertainty about the US Federal Reserve`s outlook for monetary stimulus and the budget discussions whether to raise the debt ceiling to avoid a default by October 17 is adding to caution.

After Tehran said it wanted to start talks with world powers over its nuclear program, investors started hoping of progress in resolving the long-standing dispute, meanwhile, the improving situation in Syria is also pressuring oil prices.

The five permanent members of the United Nations Security Council (China, France, Russia, UK and the United States) agreed on the most important elements of a draft resolution requiring Syria to surrender its chemical weapons, according to a UN diplomat.

- Natural gas is trading at $3.489 per cubic feet after falling 0.11%

- Gasoline is trading at $2.6722 per cubic feet after falling 0.03%

- Heating oil (diesel) is trading at $2.975 a gallon after rising 0.06%