Crude oil prices drop as US inventories gain

Crude oil prices dropped in New York and held steady in London after the US Energy Information Administration reported that crude oil stockpiles in the United States grew unexpectedly last week.

April contracts for West Texas Intermediate crude fell $3.38 to $42.33 per barrel by the close of floor trade on the New York Mercantile Exchange while Brent crude was even at price of $43.96 per barrel on the ICE Futures Europe exchange in London.

The EIA reported that crude oil inventories added 700,000 barrels in the week ending 6 February against an expected decline of around 1 million barrels, while distillates stockpiles grew by 2.1 million barrels but gasoline inventories were down by 3 million barrels during the week.

Also hurting prices were data showing that US demand for distillates, including heating oil and diesel fuel, was down 6.1 percent while China’s oil imports were down 13 percent in January and February and it is looking less sure that the Organization of Petroleum Exporting Countries will cut production quotas further when it meets this weekend in Vienna.

In addition, the International Energy Agency is scheduled to release a report Friday which is expected to say that worldwide demand for oil has fallen more than had been anticipated.

Nymex April gasoline futures were down almost five cents to $1.25 per gallon while April heating oil fell nearly 7 cents to $1.13 per gallon and April natural gas dropped 4 cents to $3.80 per million British thermal units.