US CRUDE oil prices yesterday tumbled below the psychologically important $100 (£61.95) per barrel mark for the first time since July, as stockpiles built up more rapidly than expected.
Seasonal refinery maintenance and shifting pipeline flows around the key Cushing, Oklahoma, oil hub have helped reverse a months-long decline in stockpiles, dramatically shifting the oil market’s structure over the past two weeks.
Now, instead of a squeeze on supplies, traders are betting on a near-term surplus of inventories, at least until ramped-down refineries begin to rev up operations again. Delayed US government data for the week to 11 October confirmed the first decline in Cushing stocks in 14 weeks, while industry data suggested the drawdown had continued since.
Meanwhile the discount against European Brent crude rose to its widest in six months.
The December premium for Brent crude to US futures ballooned out by $1.30 to more than $10 a barrel to the widest since April. The December WTI contract also fell to a discount versus January signalling a near-term excess of oil.