U.S. crude oil prices fall 5% as supply grows amid demand worries

Environment

An aerial view of a crude oil storage facility is seen on May 4, 2020 in Cushing, Oklahoma.
Johannes Eisele | Afp | Getty Images

U.S. crude prices fell nearly 4% on Thursday as inventories rose while industrial production fell.

The West Texas Intermediate December contract fell $3.06, or 3.99%, to $73.61 a barrel while the Brent January contract tumbled $3.02, or 3.72%, to $78.16 a barrel.

U.S. crude inventories rose by 3.6 million barrels last week while production held steady at a record 13.2 million barrels per day, according to data released by the Energy Information Agency Wednesday.

And U.S. industrial production fell by 0.6% in October as the United Autoworkers strike impacted motor vehicle output, according to data released by the Federal Reserve on Thursday.

Phil Flynn, an oil expert with the Price Futures Group, said slower industrial production combined with increased supply are playing into the slowing demand theory. Prices are now having a hard time finding support because bears, who see a recession on the horizon, are controlling the market, he said.

In China, meanwhile, crude refining throughput slowed 2.8% in October to the equivalent of 15.1 million barrels per day from a record high in September, suggesting slowing demand in the world’s second-largest economy, according to data from the National Bureau of Statistics.

This is a developing story. Please check back for updates.

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