The price of oil fell to its lowest level this year on December 7, forfeiting all of the gains since Russia’s invasion of Ukraine exacerbated the worst global energy supply crisis in decades.
The market has been steadily declining in the latter months of the year as economists brace for weakened worldwide growth in part due to high energy costs. Wednesday’s losses were driven by bigger-than-expected increases in U.S. fuel stocks.
Brent futures fell $2.18, or 2.8%, to $77.17/bbl, settling comfortably below the year’s previous closing low of $78.98/bbl touched on the first day of 2022. U.S. West Texas Intermediate crude fell $2.24, weakening further from Tuesday’s close, which was already a yearly low, to $72.01/bbl.
U.S. distillate stocks posted a build of 6.2 MMbbl, according to the Energy Information Administration (EIA), far exceeding estimates for a 2.2-MMbbl rise. Gasoline inventories climbed 5.3 MMbbl against expectations for an increase of 2.7 MMbbl. The build in fuel stocks outweighed a 5.2-MMbbl draw in crude stocks. The American Petroleum Institute had reported crude stocks draw of around 6.4 MMbbl, according to market sources.