Oil prices fell to near $82 a barrel Thursday after an unexpected increase in U.S. gasoline supplies suggested crude demand remains sluggish.
By early afternoon in Europe, benchmark oil for December delivery was down 18 cents to $82.36 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.38 to settle at $82.54 on Wednesday.
The Energy Department’s Energy Information Administration said Wednesday that commercial crude inventories rose less than analysts expected, adding 700,000 barrels. But a surprise 1.2 million barrel jump in gasoline supplies dismayed traders.
“Demand is getting worse,” Cameron Hanover said. “Lower demand is also telling another element of the story of weakness in the U.S. economy.”
Crude prices Thursday seemed to brake out of a correlation with the U.S. dollar. For most of the past year, oil would rise when the U.S. currency fell since that makes dollar—based commodities more expensive for investors with other currencies.
But Thursday the dollar fell and crude prices also fell. The euro rose to $1.4027 from $1.3951 on Wednesday. The dollar and oil usually move in opposite directions.
The dollar weakened “as investors started thinking again that the greenback was a nice place to go for safety, but not appreciation,” Cameron Hanover said.
In other Nymex trading in November contracts, heating oil fell 0.39 cent to $2.2690 a gallon and gasoline dropped 0.23 cent to $2.0706 a gallon. Natural gas fell 1.6 cents to $3.523 per 1,000 cubic feet.
In London, Brent crude rose 7 cents to $83.67 a barrel on the ICE Futures exchange.