WTI, Brent crude drop over $4 per barrel

Crude oil prices were lower on Thursday after an initial gain on the release of last week’s US inventories data by the Energy Information Administration, delayed one day by Monday’s Memorial Day holiday.

Crude oil stockpiles were down by 8.8 million barrels to 311.6 million barrels in the week ending 23 May, initially sending prices higher until the unexpectedly steep decline was explained as being a result of shipping delays due to heavy fog along the US Gulf Coast.

Gasoline inventories were also lower, falling 3.2 million barrels to 206.2 million barrels in the face of predictions that stockpiles would increase, but distillates in storage were up by 1.6 million barrels in the week to 109.4 million barrels, about twice the expected gain.

The EIA also said that fuel consumption was down by 0.7 percent in the four weeks ending 23 May over the same period last year, while a private survey sponsored by MasterCard Inc. said that demand for gasoline was down 5.5 percent last week.

A government report from the UK said that demand for gasoline was down 7 percent in April there over the same period last year, while diesel demand had decreased nearly 2 percent.

At the pump prices in the US were up to new records again overnight, with unleaded regular gasoline adding 0.8 cent to $3.952 per gallon while diesel was averaging $4.787 per gallon nationwide, a gain of 0.9 cent.

Diesel prices are now over $5 in some regions, including in California.

Fuel prices, held down so far due to government subsidies, have now gone up in Taiwan, Indonesia, Sri Lanka, and Pakistan, while India and Malaysia will make decisions soon on raising prices, causing concern that demand could fall there, as well.

At just before the close of floor trade on the New York Mercantile Exchange, July contracts for West Texas Intermediate crude was down $4.27 from Wednesday’s close to $126.74 per barrel while at last report Brent crude had dropped $4.16 to $126.77 per barrel on the ICE Futures Europe exchange in London.

Also near the close of trade in New York, Nymex June gasoline was down 2 cents to $3.43 per gallon while July heating oil had fallen 14 cents to $3.71 per gallon and July natural gas had dropped 46 cents to $11.54 per million British thermal units.