Oil prices overturned earlier gains to move lower on Thursday after a U.S. energy watchdog reported larger-than-expected rises in stockpiles of gasoline and other refined products.
Brent crude was down 0.5% at $77.86 a barrel during afternoon trade in New York. Prices suffered a volatile day, peaking at $79.40 in early trade and sinking as low as $74.79.
Nymex WTI was equally volatile, down 0.4% at $72.42 a barrel, down 2.1% from its daily peak of $74, but up 1.9% from its low point of $71.08. The United States Oil Fund (NYSE:USO), an exchange-traded fund that tracks the price of light-sweet crude, fell 1% to $67.56.
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Gasoline Stockpiles See Large Increase
U.S. inventory data from the Energy Information Administration (EIA) showed that stockpiles of gasoline rose by 10.9 million barrels to 237 million barrels — the biggest weekly build in more than three decades. The EIA had expected a drawdown of 0.2 million barrels.
Stocks of distillates, which includes heating oil, rose by 10.1 million barrels to 125.9 million barrels against EIA expectations of a 0.1 million barrels drawdown.
Analysts said the data indicated slowing demand. Patrick de Haan at GasBuddy, which tracks gasoline demand and pricing said U.S. retail gas demand saw a decrease of 12% for the week ending Dec. 30.
Crude inventories, however, fell by 5.5 million barrels, reflecting the higher throughput from gasoline refineries and also the delay in deliveries from the Arabian Gulf as shipping diverted from the Red Sea to take the longer route around Africa.
Libya Oilfields Close As Protesters Invade
Crude prices had been higher earlier in the trading session and rose by 3% on Wednesday as tensions in the Middle East and around the Red Sea continued.
Production was stopped at two oilfields in Libya. On Wednesday, the country’s largest oilfield Sharara, which can produce up to 300,000 barrels a day, was closed after protesters entered the facility.
Unrest spread on Thursday to the nearby El-Feel oilfield, responsible for producing 70,000 barrels of crude per day, forcing it to close, according to reports.
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