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Oil Prices Fall Below $80 Barrel | ASHARQ AL-AWSAT English Archive 2005 -2017
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BANGKOK, Thailand, (AP) – Oil prices fell Thursday in Asia, extending a decline from the previous session that came after an unexpected increase in U.S. crude oil inventories.

Light, sweet crude for November delivery fell 13 cents to $79.81 a barrel in Asian electronic trading on the New York Mercantile Exchange by late afternoon in Singapore. The Nymex crude contract fell 11 cents to settle at $79.94 a barrel in Wednesday’s floor session.

Crude oil futures have fallen four straight days after trading at near record levels last week.

The weekly inventory report from the U.S. Energy Department’s Energy Information Administration was mixed, analysts said.

Crude oil supplies unexpectedly rose in the week ended Sept. 28. Gasoline and distillate inventories unexpectedly fell.

And while the drop in gasoline supplies is supportive, demand for the fuel is falling, and that will pressure gasoline prices and crude futures down the road, analysts said.

The EIA said in its report that crude supplies rose 1.2 million barrels last week. Analysts surveyed by Dow Jones Newswires, on average, had predicted that inventories fell 400,000 barrels.

One million barrels of that increase were on the West Coast, the EIA said. Oil and gas infrastructure there is isolated from the rest of the country, though, and that might mean shortages elsewhere would support prices.

Gasoline inventories fell 100,000 barrels last week, while supplies of distillates, which include heating oil and diesel fuel, fell 1.2 million barrels. Analysts had expected gasoline inventories to grow 400,000 barrels, and distillate supplies to increase 700,000 barrels.

Refinery utilization rose by 0.6 percentage points to 87.5 percent of capacity. Analysts had expected an 0.4 percentage point increase.

Oil’s true value is closer to $65 a barrel, said Tim Evans, an analyst at Citigroup Inc. in New York, instead of at the near $80 a barrel or higher range it has been trading.

Many analysts feel oil prices have been driven up by speculative buying, and they argue that the market’s underlying supply and demand fundamentals do not support the record prices of recent weeks.

However, while many analysts expect oil prices to begin a seasonal decline into winter, few are willing to predict when that slide will begin. Oil prices normally drop off every year in the period between the northern summer driving season and the U.S. and European winter.

November Brent crude fell 24 cents to $76.95 a barrel on the ICE futures exchange in London.

Heating oil futures fell 0.58 cent to $2.1729 a gallon while gasoline prices rose 0.41 cent to $2.000 a gallon. November natural gas futures rose 0.3 cent to $7.280 per 1,000 cubic feet.