Oil prices fall further on news of higher US crude supplies


NEW YORK–World oil prices Wednesday resumed their downward trajectory after data showed a large increase in U.S. oil supplies. U.S. benchmark West Texas Intermediate for February delivery dropped US$1.28 to US$55.84 a barrel on the New York Mercantile Exchange. Near 1900 GMT, European benchmark Brent oil for February delivery fell US$1.70 to US$59.99 a barrel in London. Wednesday’s declines came in a holiday-shortened session dominated by a U.S. Department of Energy inventory report that analysts described as bearish. The report showed crude stocks grew by 7.3 million barrels, while gasoline and distillate stocks also grew sharply.

��The inventory report this week seems to have reawakened the market’s fears of tepid fuel demand and excess supply,�� said Gene McGillian, broker and analyst at Tradition Energy. ��It underlines the weak nature of the market.�� McGillian said the increase in gasoline supplies suggests the big drop in prices at the pump has not translated into much additional driving. ��In the U.S., we have a lot of oil around, and I don’t really see any evidence that this crater in prices has boosted demand significantly yet,�� he said. ��We’re going to be watching to see if that starts to happen.�� Oil prices have fallen about 50 percent since June on mounting supplies due to increased production and lackluster global economic growth. The decline accelerated in late November when the Organization of the Petroleum Exporting Countries decided against cutting output to respond to the drop in prices.