U.S. crude oil prices experienced a 5% decline on Thursday due to an increase in inventories coupled with concerns about diminishing demand amidst a drop in industrial production. The West Texas Intermediate December contract saw a USD$ 3.76, or 4.9%, decrease, settling at USD$ 72.90 per barrel, while the Brent January contract also dropped USD$3.76, or 4.63%, settling at USD$ 77.42 per barrel.
Both U.S. crude and the global benchmark reached their lowest levels since early July. Data from the Energy Information Agency revealed a rise of 3.6 million barrels in U.S. crude inventories last week, while production remained steady at a record 13.2 million barrels per day.
Concurrently, U.S. industrial production declined by 0.6% in October, influenced by the United Auto Workers strike impacting motor vehicle output, according to the Federal Reserve’s Thursday release. Oil expert Phil Flynn from the Price Futures Group noted that the combination of slower industrial production and increased supply contributes to the theory of slowing demand. With bears currently dominating the market, prices are struggling to find support. Meanwhile, in China, crude refining throughput decreased by 2.8% in October, signalling a slowdown in demand in the world’s second-largest economy.
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