Investing.com -- Oil prices sank on Wednesday after a larger-than-expected rise in U.S. oil inventories exacerbated the bearish tone set for the market, as U.S. GDP sank below 2%.
WTI futures settled down 48 cents, or 0.9%, at $55.06 per barrel. London’s Brent finished the New York trading session down 98 cents, or 1.6%, at $60.61.
U.S. GDP dropped to an annual rate of 1.9% in the third quarter. While that was above Wall Street expectations it still raised concerns about investment and growth ahead as the stimulus from tax cuts disappears.
Crude stockpiles rose by 5.7 million barrels for the week ended Oct. 25, the Energy Information Administration said. The market was looking for a rise of about 494,000 barrels, according to forecasts compiled by Investing.com.
“It appears that we’re finally getting back to what appears like normalization of fall season trends,” Investing.com analyst Barani Krishnan said. “Imports have risen by more than 800,000 barrels and that has contributed to the larger-than-expected build.”
“The refinery run rate has picked up for a second-straight week too, though it remains below 90%,” Krishnan added.
Gasoline inventories fell by about 3 million barrels, versus forecasts for drawdown of about 2.19 million barrels, while distillate inventories declined by 1 million barrels, compared with expectations for a drop of 2.35 million.
“Refineries are probably running more distillates now because you’re already seeing the epic declines in distillates coming off,” Krishnan said. “But gasoline draws remain a little unusually strong for this time of year.”
U.S. production remained at a record 12.6 million barrels per day for the fourth-straight week, the EIA reported.
“This must irk some oil bulls who will argue how’s that possible with the way the oil rig count is collapsing,” Krishan said.