U.S. oil prices slumped to a 27-month low Wednesday as domestic crude supplies grew more than expected.
The amount of crude stored in the U.S. surged by 7.1 million barrels last week, more than double the 3.1 million barrels forecast in a Wall Street Journal survey. At 377.7 million barrels, stockpiles are at the highest level since July 4, according to the U.S. Energy Information Administration.
Continue Reading Below
Demand for crude oil typically falls in October, as refineries shut down units to perform seasonal maintenance. However, the size of last week's inventory build was unexpected, analysts said.
"We sure have a lot of crude around," said Kyle Cooper, managing director of research at IAF Advisors, a Houston consulting firm.
Light, sweet crude for December delivery wavered between gains and losses after the inventory data came out before settling down $1.97, or 2.4%, at $80.52 a barrel on the New York Mercantile Exchange, the lowest price since June 28, 2012.
Brent crude fell $1.51, or 1.8%, to $84.71 a barrel on ICE Futures Europe.
Prices have tumbled in recent months on concerns about high global supplies. U.S. prices are down 25% from their mid-June highs, while Brent is down 26%.
"Crude-oil production is near nine million barrels a day" in the U.S., said Andy Lipow, president of Lipow Oil Associates in Houston. "I expect that we're going to have [inventory] builds over the next few weeks, as we still have a number of refiners in maintenance."
Refinery capacity utilization fell to 86.7%, the lowest since March 21.
Gasoline stockpiles fell by 1.3 million barrels to 204.4 million barrels. Analysts had predicted stockpiles would decline by 1.4 million barrels.
Though the supply decline was in line with expectations, gasoline consumption fell last week, and traders expect demand to keep falling in the coming weeks as winter weather keeps drivers off the road, Mr. Lipow said.
November reformulated gasoline blendstock, or RBOB, fell 5.78 cents, or 2.6%, to $2.1556 a gallon.
Distillate stocks, which include heating oil and diesel fuel, rose by 1.1 million barrels to 125.7 million barrels. Analysts had expected a 1.5 million-barrel weekly decrease.
November diesel slipped 3.98 cents, or 1.6%, to $2.4734 a gallon.
(Timothy Puko contributed to this article.)