- POSTED: 10 Oct 2013 05:10
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Oil prices Wednesday fell sharply after a weekly government report on US oil inventories showed a surprising build in stocks and the US budget impasse dragged on.
NEW YORK CITY: Oil prices Wednesday fell sharply after a weekly government report on US oil inventories showed a surprising build in stocks and the US budget impasse dragged on.
US benchmark West Texas Intermediate for November delivery fell $1.88 to $101.61 a barrel on the New York Mercantile Exchange, the lowest close since early July.
European oil benchmark Brent fell $1.10 to settle at $109.06 in London trade.
US oil stocks rose by 6.8 million barrels for the week ending October 4, well above the 1.4 million barrel increase forecast by analysts in a Dow Jones Newswires survey.
The week also saw a big drop in refinery use, with US plants processing at just 86 per cent of capacity, down from 89 per cent the prior week.
Gene McGillian, a broker and analyst at Tradition Energy, said this week's build in crude oil supplies comes on the heels of a similar increase last week.
"The US production level continues to run at a really robust rate and we have ample supply on oil," McGillian said.
Global markets remain jittery over the inability of Washington leaders to agree on a budget compromise that has kept the government partially shut down for the ninth consecutive day.
On Wednesday, President Barack Obama announced plans to invite all Republican and Democratic lawmakers to the White House to try to work through the conflict.
"The demand outlook continues to remain weak with the continuing government shutdown in the US seemingly no nearer to resolution," said analyst Joe Conlan at British consultancy Inenco.