Oil drops below $111 after US crude supply jump
SINGAPORE – Oil prices fell to below $111 a barrel Wednesday in Asia as a report showed U.S. crude supplies rose more than expected last week, suggesting demand growth could be waning.
Benchmark crude for June delivery was down 46 cents at $110.59 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $2.47 to settle at $111.05 on Tuesday.
In London, Brent crude for June delivery was down 40 cents to $122.05 a barrel on the ICE Futures exchange.
The American Petroleum Institute said late Tuesday that crude inventories rose 3.2 million barrels last week, more than the increase of 1.7 million barrels predicted by analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos.
Inventories of gasoline rose by 657,000 barrels while distillates fell 1.5 million barrels, the API said. Before last week's gain, U.S. gasoline inventories had fallen the previous three weeks.
The Energy Department's Energy Information Administration reports its weekly supply data later Wednesday.
Global crude demand has remained robust, led by consumption in developing economies such as China and India, despite a jump in crude prices from $84 in February.
"So far, the steady increase in oil prices has had limited impact on global oil demand, with no signs of a slowdown evident in emerging market oil demand," Barclays Capital said.
In other Nymex trading in June contracts, heating oil fell 1 cent to $3.18 a gallon and gasoline dropped 2 cents to $3.31 a gallon. Natural gas futures were down 2.1 cents at $4.65 per 1,000 cubic feet.