Oil falls below $40 after another storage surge

HOUSTON — U.S. crude fell to $39.94 per barrel Wednesday, the first time since August oil has settled below $40.

The price of West Texas Intermediate, the U.S. benchmark crude, fell after an Energy Department report showed oil inventories on the rise once again.

U.S. crude inventories have steadily grown for 10 consecutive weeks since the middle of September. During that time, prices have fallen from highs near $50 per barrel to as low as $40 per barrel. Crude briefly traded below $40 per barrel on Nov. 18.

Last week, light trading ahead of Thanksgiving coupled with the downing of a Russian aircraft by Turkey reversed the slide, sending prices up to $43.04 per barrel on Nov. 25. But with traders now watching oil storage levels rise again, and anticipating the Organization of the Petroleum Exporting Countries meeting in Vienna on Dec. 4, prices have resumed their fall.

On Wednesday, the U.S. Energy Information Administration said that commercial stores of crude rose by 1.2 million barrels to a total of 489.4 million barrels for the week ending Nov. 27. Traders had forecast crude oil stocks would fall by 800,000 barrels, according to estimates compiled by Bloomberg.

The benchmark price of U.S. oil added to losses following the release of the report. Oil was down 95 cents or 2.3 percent to $40.90 per barrel in early trading.

Oil inventories at the storage hub of Cushing, Oklahoma, where the benchmark U.S. futures contract is delivered, ticked up by 400,000 to 59 million total barrels.

Refinery runs, which had fallen sharply last month to accommodate the fall maintenance season, rose once again to 94.5 percent of total capacity, according to the EIA. This week’s figure was 2.5 percentage points higher than the one released in last week’s data. Refinery runs are likely to continue to climb higher in the coming weeks as more maintenance is completed.

Gasoline inventories rose by 100,000 barrels, the EIA said. Stores of gasoline now stand at 216.9 million barrels.