WTI prices drop by $1.49 per barrel

Crude oil prices were down again on Thursday after the US Energy Information Administration reported that inventories of gasoline and distillates were higher than expected last week, largely due to warmer than normal temperatures in much of the nation. Due to the mild weather, heating oil demand has been 20 to 30 percent below average for the past five weeks.

Crude oil stockpiles were down 1.3 million barrels during the week ending December 29, to 319.7 million barrels when they had been expected to rise by almost a million barrels. Gasoline inventories, however, were up by 5.6 million barrels, while distillates stockpiles were up 2 million barrels in the week, well over the 1.15 million barrels they had been expected to rise.

After slight early gains before the release of the inventories data, Brent crude February contracts were $1.65 lower to $56.3 per barrel in London, while West Texas Intermediate crude for February delivery dropped $1.49 to $56.83 per barrel on the New York Mercantile Exchange. The WTI decline came after a drop of $2.73 per barrel on Wednesday, it’s largest one-day decline since August 17, 2005.

Prices for Nymex heating oil were down almost 2 cents to $1.571 per gallon.