SAN FRANCISCO (MarketWatch) — Nymex oil futures on Wednesday dropped to their lowest close in nearly six months after data from the U.S. government showed a 10th weekly rise in crude supplies.

Natural-gas futures climbed on the back of a fall in U.S. stockpiles that was a bit more than expected.

Crude oil for January delivery CLF24, fell $1.38, or 1.5%, to settle at $92.30 a barrel on the New York Mercantile Exchange. Prices, which saw a 0.4% loss in Tuesday’s session, haven’t closed at a level this low since May 31, according to FactSet data tracking the most-active contracts.

“Prices on spot crude are at levels we haven’t seen in months and we feel this downward movement to the markets will continue,” said Tariq Zahir, managing member at Tyche Capital Advisors.

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The U.S. Energy Information Administration reported that crude supplies climbed by 3 million barrels for the week ended Nov. 22. Analysts polled by Platts expected a decline of 1.5 million barrels.

Late Tuesday, the American Petroleum Institute reported a 6.9 million-barrel increase.

West Texas Intermediate crude-oil futures on Nymex broke through support at $92.50 early Wednesday, said Tyler Richey, an analyst for the 7:00’s Report, which offers daily markets commentary. “The move was mildly surprising but considering how thin volumes are with the holiday [Thursday], it makes sense to see such a weak support level broken.”

“We can expect quiet trading for the rest of the week but with inventory levels still above the five-year range and technicals being overwhelmingly bearish, the path of least resistance remains lower,” said Richey.

Trading on Nymex will remain closed on Thursday for the Thanksgiving holiday. The exchange will hold an abbreviated session on Friday.

Analysts at Morgan Stanley offered a strong argument for a long-term downtrend in crude prices.

In a note dated Tuesday, they said oil prices will likely be “range bound” over the medium term as supply rebounds, but the “potential for global crude supply growth is greater than at any point in recent memory, leaving the outlook for oil prices skewed to the downside over the next few years.”

Gasoline supply on the rise

The EIA data Wednesday showed gasoline supplies rose by 1.8 million barrels, while distillate stockpiles fell 1.7 million barrels. Gasoline stockpiles were expected to rise 1 million barrels while distillate supplies, including heating oil, were seen down 1.3 million barrels, according to the Platts poll.

December gasoline US:RBZ3 closed up a penny, or 0.4%, at $2.70 a gallon and December heating oil ended at $3.05 a gallon, up less than half a cent.

Tom Kloza, chief oil analyst at GasBuddy.com, said that last week was the first week since January 1989 that U.S. crude-oil production topped 8 million barrels per day.

“This number will continue to rise and it has led to extensive discounts to world prices for crude oil in the interior of the U.S. and Canada,” he said. And “these discounts will lead to a resumption of the gasoline price downtrend in the next few weeks.”

He said the national average retail price for gasoline may approach $3.19 a gallon between now and Christmas week. The average price for a gallon of regular gasoline stood at $3.287 on Wednesday, according to AAA’s Daily Fuel Gauge Report.

Also on Nymex, January natural gas US:NGF14 added 3 cents, or 0.8%, to end at $3.895 per million British thermal units. It was trading around $3.88 before weekly supply data that were released a day earlier than usual because of Thursday’s holiday.

The EIA reported that supplies of natural gas fell 13 billion cubic feet for the week ended Nov. 22. Analysts surveyed by Platts forecast a decline of between 7 billion cubic feet and 11 billion cubic feet.

Brent holds above $110

While Nymex futures fell sharply, Brent crude bucked the trend to finish higher on Wednesday.

January Brent crude UK:LCOF4 edged up by 43 cents, or 0.4%, to finish at $111.31 a barrel on ICE Futures after a 12-cent loss on Tuesday.

“With the reaction to the six-month Iranian nuclear deal fading, the [Organization of the Petroleum Exporting Countries] summit on Dec. 4 becomes the next key event on the global market agenda, with a large majority of those surveyed expecting a quota rollover,” said Tim Evans, an energy analyst at Citi Futures, in a recent note.

Investors worried despite market rise

He said that with Brent holding above $110, OPEC would likely chose a “quieter approach” than cutting production in an attempt to juice prices. OPEC’s collective production quota currently stands at 30 million barrels per day.

Meanwhile, China’s apparent oil demand climbed in October, according to a Platts analysis of Chinese government data released late Tuesday. Demand rose 0.9% to an average of 9.83 million barrels per day, marking a reversal of the 2.3% year-over-year contraction in demand seen in September, Platts said, attributing the climb to higher refining activity.