Oil Slips Below $92.50 On Higher Crude Supplies; Volumes Below Average

Crude slipped below $92.50, trading near the lowest price in almost six months, after crude stockpiles rose for a 10th week in the US, the world’s biggest oil consumer. Yet volumes will be thinner-than-usual with US markets being closed today for the Thanksgiving holiday.

Crude inventories climbed by 2.95 million barrels to 391.4 million, the highest level since 1982, the Energy Information Administration data showed yesterday, as output increased by 45,000 barrels a day to 8.02 million, the highest level since 1989.

Gasoline inventories climbed by 1.75 million barrels after six weeks of declines; supplies were projected to increase by 500,000 barrels. Distillates, including heating oil and diesel, dropped by 1.67 million barrels; supplies were projected to decrease by 1 million.

Losses however may be limited on worries OPEC member Libya isn`t able to increase output as winter oil demand increases. The Prime Minister Ali Zeidan said his government will be unable to pay public salaries if armed militias continue to block oil fields and ports.

Yet the surge in US crude production will limit the upside movements for oil, especially once demand eases after winter due to a weak global growth outlook, and if Iranian supplies may increase if Tehran follows through on its commitments over the nuclear deal.

“The weather and supply issues are supporting oil at the moment. But beyond that, we are seeing inventory levels are rising, the demand outlook is weak and there is a possibility of more supplies coming into the market”, said Jonathan Barratt from Sydney.

- WTI crude oil futures for January is trading around $ 92.29 a barrel after falling $0.01

- Brent futures for January settlement is trading around $ 111.47 a barrel after rising $0.16

- Natural gas is trading at $ 3.897 per cubic feet after rising 0.05%

- Gasoline is trading at $ 2.7064 per cubic feet after rising 0.30%

- Heating oil (diesel) is trading at $ 3.0473 a gallon after rising 0.01%