YEREVAN, January 10. /ARKA/. Oil prices Wednesday declined as a surprisingly big increase in US petroleum product stocks raised expectations of a supply glut, Channel NewsAsia reports referring to AFP.
US benchmark West Texas Intermediate for February delivery declined US$1.34 to finish at US$92.33 a barrel on the New York Mercantile Exchange.
European benchmark Brent oil for February delivery fell 20 cents to US$107.15 a barrel in London trade.
Energy analysts rated Wednesday's weekly US oil inventory report "bearish," even though the report showed a 2.7-million-barrel decline in crude inventories, much bigger than the 600,000 forecast.
But the US Department of Energy report said gasoline stockpiles rose by 6.2 million barrels, well above the 2.0 million barrel increase consensus estimate of analysts polled by The Wall Street Journal.
Stocks of distillate oil also exceeded expectations and crude supplies at the critical Cushing, Oklahoma, trading hub rose by 1.1 million barrels.
The build at Cushing "put a lot of pressure on the market," said Carl Larry, president of consultancy Oil Outlooks and Opinions. Weak demand for gasoline and distillate also disappointed, Larry said.
Stocks of distillate are expected to decline in next week's report due to greater heating-oil demand amid the severe US cold snap.
Investors are beginning to get "a little uncomfortable" at the supply-demand dynamics, said Dominick Chirichella, co-president of the Energy Management Institute.
Chirichella said the market was further weakened by the expectation of more oil from Libya, where output is back up to 546,000 barrels a day from 250,000 barrels a day.
Still, Chirichella characterized the Libyan production outlook as unstable.
On Wednesday, representatives of the self-declared Cyrenaica regional government vowed to resume oil exports, escalating a conflict with the navy.
Regional activists have challenged the central government for greater political power, including influence over oil revenues. –0--