NEW YORK: Oil prices tumbled for a sixth straight session on Wednesday, with Brent crude falling below $98 per barrel for the first time since July as rising US fuel supplies added to overall concern about global oil demand.
A report from the US government's Energy Information Administration showed an unexpected fall in US crude inventories. But EIA reported increases in distillate inventories and gasoline supplies on the US East Coast, which includes the New York harbor.
"The report is mildly bullish, but it's not going to matter. It's going to be overshadowed by everything else that's going on right now," said Mark Waggoner, president at Excel Futures in Oregon.
"The US has lots of crude oil. The lack of demand out of China is also going to weigh quite heavily."
Brent crude, US crude and US gasoline were down around 2 percent, with US heating oil approaching a 2.5 percent fall. US crude and Brent crude were each off more than $2 per barrel at the lows of the day.
Stephen Schork, the editor of The Schork Report, said a key technical support for Brent was broken at $97.91. "Once we hit that level, it probably triggered a bunch of selling," said Schork.
"This is all continuation selling - the bulls are getting stopped out and bears are stepping in to fill the void," Schork said
Brent has fallen in 10 of the last 12 sessions, losing nearly 12 percent in its biggest 12-day loss since June 2012.
Oil's fall comes as part of a wider commodities rout triggered by data released Monday showing growth in China, the world's second-largest oil consumer, had slowed unexpectedly in the first three months of 2013.
Brent crude settled down $2.22 at $97.69, after sinking earlier to $97.26, the lowest since July 2012. US crude settled down $2.04 to $86.68. US crude "double-bottomed", hitting the same low of $86.06 in the last two days of trading.
Prices edged back up slightly in post-settlement trading after Shell declared force majeure on Nigerian Bonny Light crude oil exports. In announcing it would not meet delivery obligations, the company said it was shutting down the 150,000-barrel-per-day Nembe Creek pipeline in Nigeria for repairs.
The US dollar strengthened against the euro and the yen after comments from a European Central Bank official stoked speculation of an interest rate cut in the euro zone. A stronger dollar makes dollar-priced commodities more expensive.
Wednesday's EIA report showed US crude inventories fell unexpectedly last week, while distillates stocks posted a surprise build and gasoline supplies fell slightly more than forecast.
However, gasoline stocks on the US East Coast are up 5.3 million barrels over the same time last year.
Distillate stockpiles, which include heating oil and diesel, rose 2.36 million barrels, compared with forecasts for a draw of 500,000 barrels.
Stocks at the Cushing, Oklahoma, crude storage hub rose 1.08 million barrels to 51.15 million. Crude imports fell 289,000 barrels per day to 7.39 million bpd.
"There was nothing in this report that was really bullish. So now the market is deferring to what we're seeing in the outside markets such as the dollar and the stock market, which has been under pressure," said Phil Flynn, analyst at Price Futures Group in Chicago.
<Center><b><i>Copyright Reuters, 2013</b></i><br></center>
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