WTI prices drop more than $5 per barrel

Crude oil prices dropped significantly on Wednesday on a decline in demand and even though US inventories grew much less than had been expected last week.

The US Energy Information Administration reported that crude oil stockpiles were up by just 200,000 barrels in the week ending 14 March when they had been expected to gain 2.1 million barrels.

Gasoline inventories were down by 3.5 million barrels, while distillates dropped 2.9 million barrels.

Refinery activity fell by 1.2 percent to 83.8 percent last week, going a long way to explain the decline in stockpiles, considering that demand was down substantially.

The EIA reported that demand for oil and oil products were down 3.2 percent in the past four weeks over the same period last year, with gasoline demand down by 1 percent in that period.

April contracts for West Texas Intermediate crude dropped $5.27 to $104.15 per barrel close to the end of floor trade on the New York Mercantile Exchange, while Brent crude for May delivery was down $4.61 to $100.95 per barrel on the ICE Futures Europe exchange in London.

Nymex April gasoline was down 9 cents to $2.57 per gallon while May heating oil was 10 cents lower to $2.96 per gallon and May natural gas fell 26 cents to $9.24 per million British thermal units.

At-the-pump prices for gasoline were down 0.1 cent overnight but remained 72 cents higher than last year at the same time, while diesel prices had added 1 cent since Tuesday to a record $4.025 per gallon.