Oil Falls On Larger Than Expected Builds, Strengthening Supply Picture

After the International Energy Agency (IEA) reported Tuesday that it sees the global crude glut persisting through at least the first half of 2017, and that it was revising downward its 2016 global demand growth figures for oil consumption by 100,000 barrels per day to 1.3 million barrels per day, oil markets continued to reflect a more dour outlook Wednesday.

Following the release of the Energy Information Agency’s (EIA) Weekly Petroleum Status Report, oil prices gained off the headline news that crude inventories fell, versus analyst expectations for a build, but soon reversed course – falling by 2 percent, when traders dug deeper into the numbers, which showed record stockpiles of crude and refined products – of about 1.4 billion barrels.

The front-month WTI contract settled down 2.9 percent Wednesday on the NYMEX at $43.58 per barrel while the Brent front-month contract fell 2.7 percent on the ICE to $45.85 per barrel.

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