By Ovunc Kutlu
NEW YORK (AA) -- Crude oil inventories in the U.S. marked their highest weekly gain since 1982, the Energy Information Administration (EIA) said Wednesday.
Commercial crude oil stocks rose by a massive 14.4 million barrels for the week ending Oct. 28, EIA data revealed.
That is a 3.1 percent increase from the previous week, and smashed the analysts’ projections of a rise of 1 million barrels.
Oil prices suddenly dropped more than 3 percent after the report was released.
American benchmark West Texas Intermediate fell to as low as $44.98, while international benchmark Brent crude plummeted to $46.48 before 18:00GMT.
"The U.S. crude oil stocks jumped last week, driven by a flood of imports, a small uptick in production and a decrease in demand from refineries," said Thomas Pugh, a commodities economist at London-based Capital Economics.
Imports increased by a colossal one million barrels a day, during the same period, to reach 9 million barrels per day.
It is the highest level for net imports since October 2012, Pugh said.
U.S. oil production also ticked up to reach 8.52 million barrels a day, as American producers continue to adapt and show resilience against oil prices.
A proposed output quota limit by OPEC may not be enough to increase crude prices since U.S. producers would find incentives to produce more with rising prices.
"Any cut in OPEC’s output later this year will probably be at least partially offset by increases in production in the U.S.," Pugh said.