Oil falls to near 4-week low after big build in U.S. inventories

A petrol station attendant prepares to refuel a car in Rome
A petrol station attendant prepares to refuel a car in Rome, Italy, January 4, 2012. REUTERS/Max Rossi/File Photo
  • Biden blames higher oil and gas prices on OPEC
  • EIA shows bigger than expected jump in crude inventories

NEW YORK, Nov 3 (Reuters) - Oil prices fell to a near four-week low on Wednesday, after U.S. crude stocks rose more than expected, as gasoline inventories in the world's largest oil consumer hit a four-year low.

Brent crude futures fell $2.73, or 3.2%, to settle at $81.99 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $3.05, or 3.6%, to settle at $80.86.

That was the biggest daily percentage declines for both benchmarks since early August and the lowest closes for Brent since Oct. 7 and WTI since Oct. 13.

Weekly crude stocks rose more by 3.3 million barrels, more than expected, but gasoline stocks fell to their lowest level since November 2017. U.S. oil market supply has tightened, with stocks at the Cushing, Oklahoma storage hub at their lowest in three years.

The U.S. Federal Reserve, as expected, said it will commence tapering asset purchases this month. Traders said that could sap some speculative buying in risk assets including oil. [nL1N2RT12T]

"Markets already have been under pressure," said Phil Flynn, analyst at Price Futures Group in Chicago. "We're down because of profit taking from the Fed meeting today."

U.S. President Joe Biden, speaking at the COP26 global climate summit in Glasgow, blamed a surge in oil and gas prices on a refusal by OPEC nations to pump more crude. The average retail price of a gallon of gasoline in the United States was lately at $3.40, according to AAA, up about 20 cents from a month ago. read more

The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, meets on Thursday and is expected to reconfirm plans to keep monthly supply increases steady despite calls for an acceleration. read more

In a sign high prices are encouraging more supply, BP Plc (BP.L) said on Tuesday it would ramp up investments in onshore U.S. shale oil and gas to $1.5 billion in 2022 from $1 billion this year. Overall, U.S. output increased to 11.5 million barrels per day, equaling the highest level this year.

Additional reporting by Noah Browning, Julia Payne and Scott DiSavino; Editing by David Gregorio and John Stonestreet

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David Gaffen has been with Reuters since 2009. As of 2023 he serves as the breaking news editor for companies news, overseeing breaking events around the largest North American companies. He also writes the Power Up energy newsletter that goes out to subscribers by email on Mondays and Thursdays. In 2015 he was nominated with a team of reporters for a Daniel Loeb award for the series "The Cannibalized Company" about share buybacks; he was part of a team that won a Reuters journalism award for energy coverage in 2021. David previously worked at The Wall Street Journal and TheStreet.com. Contact: 646-301-4216