Oil falls to near $88 on surprise US supply jump
Oil prices fell to near $88 a barrel today in Asia after a report showed US crude supplies unexpectedly jumped last week, a sign demand may be weakening.business Updated: Aug 31, 2011 11:14 IST
Oil prices fell to near $88 a barrel on Wednesday in Asia after a report showed US crude supplies unexpectedly jumped last week, a sign demand may be weakening.
Benchmark oil for October delivery was down 45 cents to $88.45 at midday Singapore time in electronic trading on the New York Mercantile Exchange. Crude rose $1.63 to settle at $88.90 on Tuesday.
In London, Brent crude for October delivery was down 5 cents at $113.97 on the ICE Futures exchange.
The American Petroleum Institute said late Tuesday that crude inventories rose 5.1 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted a drop of 1.2 million barrels.
Inventories of gasoline dropped 3.1 million barrels last week while distillates increased 276,000 barrels, the API said.
The Energy Department's Energy Information Administration reports its weekly supply data later Wednesday.
Signs of waning consumer sentiment also weighed on crude. The Conference Board said Tuesday that its consumer confidence index sank more than expected in August from July, dropping to the lowest since April 2009.
"The latest readings on consumer behavior underscore the notion that the economy still has an awfully long way to go," energy trader and consultant The Schork Group said in a report.
In other Nymex trading for October contracts, heating oil fell 0.3 cent to $3.07 per gallon and gasoline futures slid 0.1 cent to $2.84 per gallon. Natural gas for October delivery gained 2.1 cents to $3.93 per 1,000 cubic feet.