(For Bloomberg fair value curves, see CFVL <GO>)
Oct. 17 (Bloomberg) -- West Texas Intermediate dropped after an industry group reported an increase in U.S. inventories last week and as more Americans than forecast filed applications for unemployment benefits.
Prices dropped as much as 1.5 percent. Supplies climbed by 5.94 million barrels, according to the American Petroleum Institute yesterday. Jobless claims reached 358,000 in the week ended Oct. 12, the Labor Department reported. Prices rose 1.1 percent yesterday before Congress voted to end the government shutdown and raise the debt limit.
"The market is reacting to the big build that we saw in oil inventory from the API," said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. "The market pretty much priced in the fact that the government would come back to work. Now we are focusing on more fundamental things."
WTI for November delivery fell $1.23, or 1.2 percent, to $101.06 a barrel at 9:30 a.m. on the New York Mercantile Exchange. The volume of all futures was 2 percent above the 100- day average.
North Sea Brent for December settlement slid 87 cents, or 0.8 percent, to $109.72 a barrel on the London-based ICE Futures Europe exchange. The November contract expired yesterday. Volume was 33 percent below the 100-day average. December Brent crude was at a premium of $8.50 to the equivalent-month WTI contract. The gap between November contracts was $8.57 yesterday.
Crude inventories at Cushing, Oklahoma, the delivery point for futures traded on the Nymex, increased 291,000 barrels, the API said.
Gasoline supplies dropped by 2.21 million and distillate fuel, including heating oil and diesel, declined by 1.32 million. The Energy Information Administration, the Energy Department’s statistical arm, won’t release weekly stockpile data today because of the government shutdown.
The schedule for the resumption of the reports will be released when it becomes available, Jonathan Cogan, a spokesman for the agency in Washington, said in an e-mailed statement
Crude supplies climbed 14.9 million barrels in the previous three EIA reports. They reached 370.5 million in the seven days ended Oct. 4, the highest level in three months, according to the agency.
API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA for its weekly survey.
"It was a huge stock build reported by the API, that was quite bearish," said Torbjoern Kjus, a senior oil analyst at DnB ASA in Oslo.
Last week’s jobless claims were higher than the 335,000 forecast by economists surveyed by Bloomberg. Federal workers filed about 70,000 claims two weeks ago, the Labor Department report showed. Those were tallied in a separate category and didn’t influence the headline reading, though contractors’ furloughs will count, a Labor Department spokesman said.
"The data was not great," Flynn said. "The jobless claims were higher than expected. There are signs that the economy is slowing a little bit."
The passage last night of the Congress deal by wide margins -- an 81-18 vote in the Democratic-led Senate, followed by a 285-144 vote in the Republican-controlled House -- allows the U.S. to avoid default and ends the shutdown that began Oct. 1 and has taken $24 billion out of the economy.
President Barack Obama signed the bill just after midnight, according to a White House statement. The measure puts government workers back on the job as soon as today and permits the U.S. to continue paying its debts, benefits and salaries.
--With assistance from Mark Shenk in New York, Grant Smith in London, and Terry Atlas and Victoria Stilwell in Washington. Editors: Dan Stets, Charlotte Porter
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