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Crude Oil Futures Drop Sharply on Increased Inventories

Posted on: Thursday, 18 August 2005, 09:00 CDT

Crude oil futures drop sharply on increased inventories

NEW YORK, Aug. 17 (Xinhua) -- Crude oil prices declined for a third session Wednesday as a government report showed that US crude inventories increased last week.

On the New York Mercantile Exchange, light, sweet crude oil futures for September delivery fell 1.43 dollars to 64.65 dollars a barrel, and London's Brent crude-oil futures contract for October delivery shed 1.66 dollars to 63.57 dollars a barrel in early trading.

Traders quickly adjusted their positions after the government released its weekly inventory report at 10:30 a.m. in Washington. The Energy Department said crude-oil supplies rose 241,000 barrels to 321.1 million in the week ended August 12, and inventories of distillate fuels, which included heating oil and diesel, added 1. 19 million barrels to 131.1 million.

The inventory report also showed that gasoline stockpiles dropped 4.97 million barrels to 198.1 million, the seventh straight decline. As it was almost at the end of the peak gasoline consumption season, traders shrugged off the gasoline numbers and focused on the readings of distillate fuels.

Also on Wednesday, the Labor Department reported that inflation at the wholesales level increased by the largest amount nine months in July, reflecting the increasing pressure consumers were taking at gas pumps.

In early New York trading, gasoline for September delivery fell 5.36 cents to 1.93 dollars per gallon. But the government report showed the average nationwide price for gasoline rose to 2.55 dollars per gallon, up 18 cents per gallon in just one week.

Source: Xinhua News Agency - CEIS

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