Oil prices fall as US inventories grow

Crude oil prices fell substantially Wednesday after the US Energy Information Administration released its weekly inventories report, which showed that stockpiles of crude oil, gasoline and distillates all grew last week.

According to the EIA, US crude oil stockpiles grew by 6.7 million barrels in the week ending 2 January against an expected gain of only about 1.5 million barrels during the week.

Gasoline inventories added 3.3 million barrels to 211.4 million barrels while distillates in storage gained 1.8 million barrels to 137.8 million barrels last week.

One report showed that gasoline consumption in the US was down 1.8 percent last week from the week before, had dropped 3.5 percent when compared with the same week last year and was down 4 percent on average over the past four weeks as demand for fuel dropped on slightly higher prices at the pump.

The average price at the pump for regular unleaded gasoline in the US was up 4 cents overnight to $1.73 per gallon according to US motorist lobby AAA, but prices remain much lower than last year at this time.

February contracts for West Texas Intermediate crude were down $4.56 to $44.04 per barrel about half an hour before the close of floor trade on the New York Mercantile Exchange, while at last report Brent crude for February delivery had droped $3.54 to $46.99 per barrel on the ICE Futures Europe exchange in London.