LONDON, July 20: World oil prices weakened on Wednesday as traders digested a smaller-than-expected drop in US crude inventories despite hurricane conditions in the Gulf of Mexico.
New York’s main contract, light sweet crude for delivery in August, lost $1.16 to $56.30 per barrel in early deals.
In London, the price of Brent North Sea crude oil for delivery in September lost 90 cents to $56.46 per barrel.
The Department of Energy said US crude oil stocks fell by 900,000 barrels to 320.1 million barrels for the week ending July 15.
Analysts’ forecasts were for a 3.45-million drop in the wake of production shutdowns in the Gulf of Mexico, caused by Hurricane Dennis — whose onset halted most US oil production in the region around July 10.
The figures were a “shocker”, Societe Generale analyst Deborah White said.
“Obviously it was bearish for crude. We had expected a significantly steeper draw, something more like four times as deep a draw as we saw.”
The DoE also said petrol or gasoline stocks dropped by 1.3 million barrels, less than forecasts of a 1.5-million decrease.
But levels of distillate products, used for heating oil and diesel, rose by a greater-than-expected 2.3 million barrels for the week, the DoE said. That beat expectations of a 1.7-million build.—AFP
