The price of oil dropped another 1 percent Tuesday to below $94 per barrel, extending a month-long slide due to expectations of rising supplies.
Benchmark U.S. crude for December delivery fell $1.25, or 1.3 percent, to $93.37 per barrel in midday trading in New York. Brent crude, which is used to price international oil used by many U.S. refiners, fell 90 cents to close at $105.33.
U.S. crude stockpiles have increased in each of the past six weeks, mostly because of rising domestic production, and were more than 10 percent above their five-year average near the end of October.
Figures for the week ending Nov. 1 are expected to show a further increase of 2.5 million barrels, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
The weekly supply report from the Energy Department’s Energy Information Administration will be out on Wednesday.
Crude is down 10 percent since closing at $104.10 on October 2. It had climbed above $110 in early September amid instability in Egypt and the civil war in Syria. It began to sink later in September, and its decline accelerated in October as Iran re-entered international talks over its nuclear program and rising U.S. crude stockpiles indicated muted demand.
Analysts say oil might have fallen further still if not for continued instability in Egypt and new fighting in Libya that is impacting Libyan crude exports. “The ongoing delivery outages in Libya are preventing prices from falling,” said analysts at Commerzbank in Frankfurt.
But the expectation is that oil has yet further to fall. Oil analyst Jim Ritterbusch wrote in a report at the end of trading Tuesday that “both crude benchmarks still appear poised for additional price weakness.”
Drivers in the U.S. are paying less for gasoline than they have all year. The national average retail price fell a penny to $3.24 per gallon. That’s 23 cents per gallon less than last year at this time, and it’s the lowest average price since Dec. 21 of last year.
In other energy futures trading on Nymex:
- Wholesale gasoline was down 1.2 cents to close at $2.516 a gallon.
- Heating oil was down 1 cent to close at $2.864 a gallon.
- Natural gas rose 2.1 cents to $3.466 per 1,000 cubic feet.