Surprise inventories increase tumbles oil futures

The new weekly data on US crude oil inventories released Wednesday showed oil stockpiles up by 1.1 million barrels, gasoline inventories 300,000 barrels higher, and distillate inventories 1.7 million barrels greater in the week ending June 24.

The advances in inventories were unexpected and sent prices tumbling to around six percent below record high prices reached on Monday.

The rise in stockpiles was attributed to an increase in imports of crude oil to 11 million barrels per day as well as to refineries in the US that were operating at 96.3 percent of capacity.

West Texas Intermediate August contracts were down $1.30 of one point before settling at a decline of $1.00 to $57.20 per barrel at early afternoon on the New York Mercantile Exchange. This is in addition to a decline of $2.34 on Tuesday.

In London, Brent crude for August delivery on the International Petroleum Exchange fell 94 cents to $56.24 per barrel at late afternoon.

One analyst in New York blamed the surge in prices earlier in the week to the presidential election in Iran and said that it would take “more than that” to keep then at the $60 per barrel level.

Finished product prices were also lower as Nymex July gasoline futures were down 2.23 cents to $1.6025 per gallon and July heating oil futures fell 2.04 cents to $1.6000 per gallon.

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