Oil Futures Settle Lower on Wednesday as EIA Reports Rise in Inventories

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Oil futures plunged on Wednesday following news from a weekly government report confirming a larger-than-expected increase in crude oil inventories, according to Bloomberg MarketWatch.

October West Texas Intermediate crude dropped $1.33, or 2.8%, to settle at $46.77 a barrel on the New York Mercantile Exchange. Prices traded around $47.50 a barrel before supply data.

On London’s ICE Futures Exchange, October Brent crude, the global benchmark, fell 91 cents, or 1.8%, to settle at $49.05 a barrel.

The U.S. Energy Information Administration early Wednesday reported that domestic crude supplies increased by 2.5 million barrels for the week ending August 19. S&P Global Platts analysts expected a 200,000-barrel climb, but lower than the rise of nearly 4.5 million barrels reported late Tuesday by the American Petroleum Institute.

Total domestic crude output fell by 49,000 barrels a day to 8.548 million barrels a day for the latest week, according to the EIA report.

On the New York Mercantile Exchange, September natural gas added 3.5 cents, or 1.3%, to settle at $2.796 per million British thermal units.

Oil prices had earlier found some support after an OPEC delegate told The Wall Street Journal that Iran sent a letter to OPEC members stating it would attend the informal meeting next September in Algiers. Many investors interpreted the letter as a reversal in Iran’s position since it previously declined to attend the April meeting where a plan to freeze production failed.