Oil down $1 barrel on inventory reports

Following the US department of energy’s weekly report on oil inventories in the United States, crude oil prices dropped by nearly a dollar per barrel on Wednesday.

While crude oil stockpiles were down by 1.6 million barrels for the week ending June 17, to 327.4 million barrels, which was about the amount predicted, gasoline inventories rose by 200,000 barrels and distillate stockpiles increased by 1.3 million barrels.

The increase in stockpiles of these finished petroleum products helped worries over supplies that had been a big factor in the price increases.

July gasoline contracts on the New York Mercantile Exchange were down 1 cent to $1.6170 per gallon, and heating oil prices for July also fell a penny.

IPE Brent for August delivery was down 92 cents to $56.58 per barrel, and prices for West Texas Intermediate trading on the New York Mercantile Exchange lost 95 cents to $58.09 per barrel.

Prices on WTI contracts for later month deliveries also fell, but prices for January and February 2006 contracts remained above $60 per barrel.

Also aiding in crude oil price declines was the cancellation of a threatened strike by Norwegian oil workers.