Crude prices drop on US inventories data

Crude oil prices dropped significantly on Wednesday after release of the weekly US inventories report from the Energy Information Administration showed that crude stockpiles were down a bit less than had been expected last week.

Inventories of crude oil dropped 400,000 barrels in the week ending 23 November on an expected decline of half a million barrels to 313.2 million barrels, down 27.6 million barrels from last year at the same time but still in the upper half of average for this time of year.

While overall inventories dropped, crude oil in storage at the key Cushing, Oklahoma depot added 600,000 barrels to a total of 15.2 million barrels, the second week in a row of gains there.

Meanwhile, gasoline stockpiles gained 1.4 million barrels to 196.6 million barrels, more than twice the expected increase as demand slowed, while distillates inventories dropped by 100,000 barrels to 130.9 million barrels.

Also helping prices lower is the expectation that OPEC will decide to increase output when it meets next week.

Just before the close of floor trade on the New York Mercantile Exchange, West Texas Intermediate for January delivery had dropped $3.72 to $90.70 per barrel, well below last week’s record high at over $99 per barrel.

January contracts for Brent crude fell $2.24 to $90.28 per barrel on the ICE Futures Europe exchange in London.

Nymex December gasoline dropped 9 cents to $2.29 per gallon while January heating oil was down 8 cents to $2.58 per gallon and January natural gas fell 33 cents to $7.49 per million British thermal units.