Brent oil prices trading down nearly 4 percent around $72

Brent crude oil prices settled down $2.80, or 3.72 percent in trading on Wednesday, closing at $72.39 a barrel. Brent crude traded from $72, lowest since the low of $70.84 on October 13th, to $76.19.

Brent crude oil futures ended at their lowest levels in two months on Wednesday, pressured by a sell-off in product futures after government data showed big increases in US distillate and gasoline inventories last week.

Traders ignored a drawdown in crude stocks that the US Energy Information Administration reported, which they called bearish relative to a larger drop in supplies shown in industry data released late on Tuesday. The drawdown in crude stocks surprised forecasters who had predicted a stock build.

“Despite the (crude) drawdown, fundamentals remain bearish and the drawdown was not the result of demand improving, but because of year-end inventory management for tax purposes at oil companies,” said Gene McGilllian, analyst at Tradition Energy in Stamford, Connecticut.

“The size of the product build was surprising and somewhat bearish and that is weighing on crude right now,” said Stephen Schork, editor of the Schork Report in Villanova, Pennsylvania.

The Brent/West Texas Intermediate spread narrowed to $1.72, after ending at $2.38 on Tuesday. WTI’s value started dropping versus Brent in the last week of November, after being positive since the end of August.

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