Price of oil falls on winter fuel fears
US light crude fell over $1.31 to $47.55 a barrel, $8 below the record $55.67 peak struck in late October.
Brent crude in London lost $1.10 to $43.65 a barrel, unwinding all the gains of the previous session.
High OPEC production in recent months has generated ample supply on international crude markets and the US Energy Information Administration (EIA) on Wednesday reported a seventh successive weekly rise in crude stocks.
“Buyers are voting with their feet. Futures prices were too high and stocks seem to be ample,” said William Buchanan at Standard Bank in London.
“The insatiable desire for sweet crude seems to have fizzled out. There is a prompt glut coming up to the end of the year and people are less and less willing to pay up for expensive crude,” Mr Buchanan added.
By contrast, US distillate stocks, including heating oil and diesel, are 17 million barrels below last year, a potential worry if the winter is a cold one. They fell for the eighth week running, the US data reported on Wednesday.
Temperatures in the big US Northeast heating oil market are expected to remain chilly for the next 10 days.
Private forecaster EarthSat said the coming US winter could be 4.5% colder than last year.
US distillate consumption has been running 7% above last year as solid economic growth drives demand, raising a hurdle for fuel suppliers trying to build up heating oil stockpiles for the high-demand winter season.
In Germany, the largest heating oil market in Europe, consumer stocks of heating oil are also failing to build.
They stood at 60% of capacity on November 1, the lowest level for the time of year in at least 20 years, trading sources said.
“It’s off the bottom of the scale. We’ve never had a year as low as this in the past 20 years,” said one trader at an oil major, adding that was the limit of the company’s historical data.
