Oil futures fell Wednesday after an industry trade group reported a large rise in U.S. crude inventories last week. West Texas Intermediate crude for December delivery
fell $1.98, or 2.4%, to $81.93 a barrel on the New York Mercantile Exchange. January Brent crude
the global benchmark, was down $1.73, or 2%, at $82.99 a barrel on ICE Futures Europe.
The American Petroleum Institute reported late Tuesday that U.S. crude supplies rose by 3.6 million barrels for the week ended Oct. 29, according to sources. The API also reportedly showed an inventory decline of 552,000 barrels for gasoline, but distillate stockpiles edged up by 573,000 barrels. Crude stocks at the Cushing, Oklahoma, delivery hub, meanwhile, fell by 882,000 barrels for the week, sources said. Inventory data from the Energy Information Administration will be released Wednesday. If the EIA “were to show a similarly pronounced inventory build, oil prices could fall further,” said Carsten Fritsch, analyst at Commerzbank, in a note. On average, the EIA is expected to show crude inventories up by 300,000 barrels, according to a survey of analysts conducted by S&P Global Platts. The survey also calls for supply declines of 900,000 barrels for gasoline and 1.5 million barrels for distillates. Crude could also prove sensitive to the outcome of a pivotal Federal Reserve meeting on Wednesday. The Fed is fully expected to begin scaling back its monthly bond purchases, while investors will closely watch to see if policy makers change their inflation assessment or if Chairman Jerome Powell pushes back against rising market expectations that interest rate increases could begin sooner than previously indicated. See: 5 things to watch for when Fed meets Wednesday A meeting Thursday of the Organization of the Petroleum Exporting Countries and its allies — a group known as OPEC+ — is also in focus. U.S. President Joe Biden and others have ramped up pressure on the group to boost output more aggressively than currently planned. Biden on Wednesday told reporters at the COP26 climate summit in Glasgow that it was “not right” for Russia, Saudi Arabia and other producers to hold back production to boost prices, news reports said. Producers, however, have appeared reluctant to move beyond plans to increase output beyond the monthly increments of 400,000 barrels a day they previously agreed. Moreover, producers have struggled to meet those production goals.