Crude oil prices plunged on Wednesday after conflicting stockpile reports and an unexpected rise in crude oil supplies shook the confidence of analysts and traders, according to Bloomberg MarketWatch.
On the New York Mercantile Exchange, February West Texas Intermediate crude fell 81 cents, or 1.5%, to settle at $52.49 a barrel.
Meanwhile, February Brent crude, the global benchmark, dropped by 89 cents, or 1.6%, to end trading at $54.46 a barrel on London’s ICE Futures Exchange.
Late Tuesday, the American Petroleum Institute reported that domestic crude oil inventories revealed a decrease of 4.1 million barrels for the week ending December 16. On Wednesday morning, the U.S. Energy Information Administration reported that domestic crude supplies grew by 2.26 million barrels for the same period. Stockpiles had been expected to fall by 2.3 million barrels, according to a survey of 13 analysts and traders by The Wall Street Journal.
The EIA and API reports often reflect large discrepancies in weekly supplies.
“Today’s EIA report should provide some headwinds to the week’s crude rally as a build of 2.3 million barrels stands in stark contrast to analyst expectations and yesterday’s API expectation of a more than 4 million barrel draw,” said Troy Vincent, an oil analyst for ClipperData.
Meanwhile, January natural gas futures surged 27.9 cents, or 8.6%, to close at $3.5420 per million British thermal units on the New York Mercantile Exchange, marking the highest daily gain for natural gas futures since late December 2015.
Natural gas futures have benefited from a recent cold snap that is expected to shrink existing supplies in the U.S.