NEW YORK -- Oil prices declined Wednesday as a government report showed U.S. crude supplies grew last year by the most in a year.
The Energy Information Administration (EIA) said U.S. crude supplies increased by 6.8 million barrels to 370.5 million barrels for the week ended Oct. 4, more than four times than what analysts expected.
The EIA report also showed that U.S. refineries ran at 86 percent of total capacity, down from 89 percent of the prior week. Units are usually idled for maintenance after the peak summer season.
As the U.S. government shutdown stretched into a ninth day, the budget deadlock continued to erode investor confidence, hurting demand for crude.
Though both President Barack Obama and House Speaker John Boehner have expressed willingness to negotiate on budget and debt ceiling, Obama said Tuesday that he had yet to see serious proposals from GOP that would allow both parties to resolve their key differences to end the government dysfunction.
Also in the day, Federal Reserve Vice Chairwoman Janet Yellen was nominated by Obama to succeed Ben Bernanke as the next head of the U.S. central bank. Yellen, widely considered as a policy "dove, " is likely to continue the Fed's current monetary stimulus policies, which is deemed positive for oil prices in the long term.
Light, sweet crude for November delivery slipped 1.88 U.S. dollars to settle at 101.61 dollars a barrel on the New York Mercantile Exchange, while Brent crude for November delivery lost 1.1 dollars to close at 109.06 dollars a barrel.
