Brent is off -2.3%, while WTI has fallen -2.6%. Oil supplies fell by just -1.2% compared with -2.4% expected per Citi.
Oil markets guru Stephen Schork says it's another sign the economy is stalling.
"The weakness that we are seeing is a continuation of selling; we've been in a bear market since the first of the month," he told us.
He noted the DOE report also showed a large supply build in Cushing, Oklahoma — a key transmission point for shipping crude stocks — as well as a sharp build in gasoline supplies on the East Coast. Since that hit a low of -12% versus the five year average in the wake of Hurricane Sandy, regional gas supplies are now at a 7.5% surplus compared to the average.
The report was o nly the third negative draw this year, he said, and oil reserves remain near all-time highs.
"You can't have inflation if you don't have economic growth," he said.
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