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Oil prices extend decline to near US$99 a barrel on increase in US crude supplies

Oil prices extend decline to near US$99 a barrel on increase in US crude supplies

Oil prices fell further Thursday after dropping by more than a dollar in the previous session on larger-than-expected increases in U.S. crude and gasoline supplies.
Prices remained supported near Tuesday's record close of US$100.88 a barrel as the U.S. dollar tumbled to fresh lows against the euro and worries about the American economy drove more money into energy futures as a hedge against inflation.
The report by the U.S. Energy Department's Energy Information Administration showed that country's crude oil inventories rose by 3.2 million barrels, or 1 percent, to 308.5 million barrels.
Although that number is slightly lower than levels a year ago, it is well ahead of the 2.4 million barrel gain analysts had been expecting, according to a survey by Dow Jones Newswires. It was the seventh straight week the report showed a rise in crude inventories, suggesting the U.S. at least has more than enough oil to meet demand.
Light, sweet crude for April delivery lost 36 cents to US$99.28 a barrel in Asian electronic trading on the New York Mercantile Exchange, late afternoon in Singapore.
The contract fell US$1.24 to settle at US$99.64 a barrel Wednesday after surging as high as US$102.08 a barrel, a trading record. On Tuesday, the contract jumped $1.65 to settle at a record US$100.88 a barrel.
The EIA data showed gasoline inventories also jumped more than expected _ by 2.3 million barrels to 232.6 million barrels; analysts had expected a more modest rise of 400,000 barrels. Refinery activity also increased much more than expected.
The weakening U.S. dollar also helped prop up prices. The 15-nation euro jumped to a record US$1.51 against the greenback, meaning that crude remains a relative bargain for buyers overseas. Gold _ another commodity seen as a hedge against inflation _ also struck a record Wednesday.
In his testimony to the U.S. Congress Wednesday, Federal Reserve Chairman Ben Bernanke warned of sluggish business growth ahead, and signaled a willingness by the central bank to cut interest rates again. But Bernanke also noted that the Fed must keep a close watch on inflation given the sharp rise in energy prices and other costs.
Heating oil futures lost 1.16 cents to US$2.7595 a gallon (3.8 liters) while gasoline futures dropped 2.12 cents to US$2.4565 a gallon.
Natural gas futures advanced 3.8 cents to US$9.098 per 1,000 cubic feet.
Brent crude rose 31 cents to US$97.96 a barrel on the ICE Futures exchange in London.


Updated : 2021-06-20 17:39 GMT+08:00