Light, sweet crude for January delivery dipped to this month’s lowest levels at US$76 on the Nymex, while Brent crude dropped to US$76.4. This has been the lowest settlement price since Oct. 14, as crude dips over concerns of an impending increase in oil supplies. The sell-off is being led by producers, refiners and other "commercial" users of oil, who want to offload with huge surplus amid apprehensions that higher prices will lead to an increased influx of crude into the market. Oil prices of the first few futures contracts relative to outer months have been pushed down, signaling that the market is oversupplied and has little need for oil in the short term.
Adding to the pessimism is a decision by the US Commerce Department to cut Q3-09 gross domestic product growth to 2.8% from an earlier estimate of 3.5%. The American Petroleum Institute has reported a 3.3 mln barrel increase in oil inventories, a 1.7 mln barrel build in gasoline stocks and a 2.4 mln barrel decline in distillate inventories. Refinery utilization was estimated at 82.2% of capacity.