Wed | Aug 22, 2018

Oil price falls on crude inventory data

Published:Friday | July 8, 2016 | 12:00 AM

The price of oil plunged after a government report on fuel stockpiles.

The US Energy Information Administration said crude oil inventories shrank by 2.2 million barrels last week, but analysts expected a drop of 2.6 million barrels, according to S&P Global Platts. Those inventories are historically high.

Nate Thooft, head of global asset allocation for Manulife Asset Management, noted that stocks and oil prices have often traded in tandem this year.

"Inventories did not go down as much as expected in the US," he said. "Oil fell dramatically pretty quickly."

Benchmark United States crude lost US$2.29, or 4.8 per cent, to US$45.14 a barrel in New York. Brent crude, used to price international oils, lost US$2.40, or 4.9 per cent, to US$46.40 a barrel in London. In the morning, oil prices rose almost two per cent.

The news also affected big energy stocks. Exxon Mobil fell US$1.65, or 1.8 per cent, to US$92.44 and Chevron retreated US$2.37, or 2.3 per cent, to US$102.21.

In other energy trading, wholesale gasolene lost seven cents, or 4.9 per cent, to US$1.36 a gallon. Heating oil fell six cents, or 4.1 per cent, to US$1.41 a gallon. Natural gas lost one cent to US$2.78 per 1,000 cubic feet.