Energy stocks are leading U.S. markets lower Thursday after a bigger-than-expected rise in domestic crude inventories, which is extending declines for global crude prices amid persistent concerns over the health of the world economy.
The Energy Information Administration said crude stocks rose by 6 million barrels in the week ending October 5, the third consecutive weekly advance and more than double the Street consensus of 2.6 million, to a weekly total of 409.5 million barrels. Stocks at the central distribution hub at Cushing, Oklahoma, which is used to price futures contracts, rose by 2.4 million barrels.
Brent crude contracts for December delivery, the global benchmark, were seen $2.78 lower from their Wednesday close in New York and changing hands at $80.27 per barrel while WTI contracts for November delivery, which are more tightly liked to U.S gas prices, closed $2.20 lower on the day at $70.97 per barrel.
The data, which followed a larger-than-expected buildup of 9.7 million barrels from the private American Petroleum Institute yesterday, is putting downward pressure on crude prices and sending U.S. energy stocks to the bottom of both the Dow Jones Industrial Average I:DJI and the S&P 500 I:GSPC , along with comments from OPEC Secretary-General Mohammad Barkindo, who told an industry conference in London Thursday that "the market remains well supplied" and that "projections for 2019 clearly show a possible rebuild of stocks".
Energy stocks on the Dow were marked 3% lower following the EIA data, with Chevron (CVX) - Get Report falling 3.2% to $118.7 and Exxon Mobil (XOM) - Get Report sliding 2.51% to 81.98 and pulling the stock into negative territory for the year. The S&P 500 Energy Index was marked 2.7% to the downside, extending its third quarter decline to around 4%.