Oil Prices Fall Sharply on Positive Supply

Oil prices fall sharply on positive supply

NEW YORK, March 8 (Xinhua) — World oil prices fell sharply Wednesday to the lowest level since Feb. 17, as U.S. crude oil inventories rose to their highest level since May 1999 and OPEC would maintain its output ceiling.

New York’s main contract, light sweet crude for delivery in April, lost 1.56 dollars to close out the week at 60.02 dollars a barrel, after hitting a low of 59.25 dollars earlier in the day.

The heating oil dipped 2.81 cents to close to 1.6941 dollars a gallon as gasoline futures rose 1.68 cents to settle at 1.6502 dollars per gallon. Natural gas futures declined 3 cents to finish at 6.648 dollars per 1,000 cubic feet.

The U.S. Department of Energy announced Wednesday that its crude oil inventories rose by 6.8 million barrels to 335.1 million in the week to March 3, 10 percent higher than at the same stage one year ago, and are at their highest level since May 1999.

U.S. gasoline inventories dipped 1.1 million barrels to 224.8 million, sharper than expected. Reserves of distillates fell by 2. 7 million barrels to 131.4 million, slightly less than the predicted decline of 1.5 million.

The Organization of Petroleum Exporting Countries (OPEC), who pumps about a third of the world’s oil, reassured on Wednesday that there will be no change to the group’s 28 million barrels per day ceiling that has been in place since July 2005, despite forecasts for lower demand in spring.

OPEC president Edmund Daukoru said the 11-nation cartel would keep close tabs on the situation in the period between now and summer when demand traditionally eases.