WTI nearly flat after US inventories gains

Crude oil prices were nearly flat in New York at the close of floor trade after falling in response to the weekly inventories report from the US Energy Information Administration, which was delayed one day due to the Martin Luther King, Jr Day holiday on Monday.

At the 2:30 p.m. close of floor trade on the New York Mercantile Exchange, March contracts for West Texas Intermediate crude was down just 10 cents to $43.45 per barrel, while at last report Brent crude for March delivery had dropped $1.44 to $43.58 per barrel on the ICE Futures Europe exchange in London.

The EIA reported during the day that US crude oil inventories added 6.1 million barrels in the week ending 16 January, bringing crude in storage to 332.7 million barrels, while gasoline stockpiles were up by 6.5 million barrels in the week to 220 million barrels.

The gains in inventories reflected the downturn in demand for oil and oil products that was also highlighted by new data from the Federal Highway Administration which showed that US motorists drove 5.3 percent fewer miles in November 2008 than they had in the same month in 2007.

Downward pressure on prices also came from a separate report from the Commerce Department that new home construction in the US dropped by 15.5 percent in December and by a Labor Department report showing that new jobless claims were up again last week.

In afternoon trade Nymex February gasoline futures dropped 11 cents to $1.07 per gallon while March heating oil was down 7 cents to $1.31 per gallon and March natural gas fell 10 cents to $4.65 per million British thermal units.