Oil futures turned lower Thursday, giving up gains that had seen the U.S. benchmark trade above the $95-a-barrel threshold for the first time in a year as investors weighed tightening U.S. crude inventories.
Price action
-
West Texas Intermediate crude for November delivery
CL00,
-1.25% CL.1,
-1.25% CLX23,
-1.25%
fell 88 cents, or 0.9%, to $92.80 a barrel on the New York Mercantile Exchange, after trading as high as $95.03. -
November Brent crude
BRNX23,
-0.88% ,
the global benchmark, was down 66 cents, or 0.7%, at $95.89 a barrel on ICE Futures Europe, after hitting a session high of $97.69. -
Back on Nymex, October gasoline
RBV23,
-2.40%
fell 1.9% to $2.548 a gallon, while October heating oil
HOV23,
+0.81%
rose 1% to $3.347 a gallon. -
November natural gas
NGX23,
+1.14%
rose 0.6% to $2.915 per million British thermal units.
Market drivers
The Energy Information Administration on Wednesday reported that crude stocks at the Cushing, Okla., delivery hub fell to under 22 million barrels. Analysts at Saxo Bank said that is close to operational minimums and lowest since the seasonal lows of 2014.
“Market focus is shifting back to the tightening in the physical market, which outweighs a weakening risk appetite amid broader market jitters,” said UBS analysts led by Henri Patricot.
The inventories data energized a Wednesday rally that saw the U.S. benchmark log its highest close in nearly 13 months.
The drop in U.S. inventories comes as Saudi Arabia and Russia have extended their production cuts until the end of the year.
“Heading into winter, worries about supply tightness may continue pushing prices north, but whether this will evolve into a long-lasting uptrend is questionable. The challenges facing China and Europe, the two largest oil consumers in the world behind the U.S., could further dent demand, something that may start being reflected in prices at some point in the future,” said Charalampos Pissouros, senior investment analyst at XM.
Meanwhile, the EIA on Thursday reported natural gas in storage rose by 90 billion cubic feet, or Bcf, last week. Analysts surveyed by S&P Global Commodity Insights, on average, had expected an 88 Bcf injection.
