Oil prices fell on Wednesday (Sept. 19) for the third day in a row as traders realized that a recent run-up to $100 may have been overdone.
The Associated Press reported that oil was at $91.99 in early afternoon trading on the New York Mercantile Exchange. It was down $3.30, or 3.5 percent.
Several things were pushing prices down. Analysts said traders are taking profits after oil got above $100 per barrel on Friday for the first time since May. And there have more signs this week that the global economy is slowing down, which tends to push oil prices lower because people and businesses use less energy.
Also, crude inventories rose three times more than analysts had expected last week. Crude supplies grew by 8.5 million barrels to 367.6 million barrels. That’s 8.4% higher than at the same time last year, according to the Energy Information Administration’s weekly report.
Analysts expected a rise of 2.5 million barrels, according to Platts, the energy information arm of McGraw-Hill Cos.
Oil has fallen about 7% this week. It hadn’t dropped below $92 per barrel since Aug. 10. Regular gasoline at the pump fell a half a penny to $3.854 per gallon.
Oil’s decline came despite some news that might have pushed prices higher. The Bank of Japan said on Wednesday that it would buy more government bonds, which is intended to boost Japan’s economy. And ongoing tensions in the Middle East have tended to drive prices higher.
“Yet we continue to fall,” said Addison Armstrong, senior director for market research at Tradition Energy. “I think that has accelerated some profit-taking. After all, crude did have a pretty good run from $86 up to $100.”
Brent crude traded on the ICE Futures exchange in London also fell sharply. It was down $3, or 2.7 percent, to $109.03 per barrel.
Traders were also keeping their eyes on oil supplies as U.S. Gulf Coast refineries returned to production after shutting down due to Hurricane Isaac.
“We’re getting back a few more refineries post (Hurricane Isaac), but on the flip side a few refineries had some restart issues and a few are headed into maintenance,” said Carl Larry of Oil Outlooks and Opinions in a newsletter.