Oil falls 2% as US stocks rise sharply and demand seems to be flagging
New York — Oil fell 2% on Wednesday after a sharp rise in US inventories of refined fuel suggested demand may be flagging, while US crude production hit another weekly record. Government data showed that US crude stocks fell 5.6-million barrels, more than expected, though this was partially the result of the closure of the Keystone pipeline after a leak in South Dakota in mid-November, which cut flows to Cushing, Oklahoma. The line re-opened on Tuesday. However, petrol stocks rose by 6.8-million barrels and distillate inventories were up 1.7-million barrels, both exceeding expectations according to a Reuters poll. This hit prices of both crude and products in a market which is already heavily tilted bullish and thus potentially vulnerable to a sell-off, analysts said. Petrol stocks tend to build in December, but at 221-million barrels of inventory, stocks are slightly above the five-year average for this time of year. US crude production rose to 9.7-million barrels per day (bpd), an...
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