Oil price falls as US reserves rise

Oil prices gave up earlier gains this evening, extending losses from the previous day as rising stockpiles of US crude outweighed positive economic data.

US crude was down 96 cents at $71.09 a barrel after falling $2.32 on Tuesday. Brent crude fell 91 cents to $70.91.

The US Energy Information Administration (EIA), the statistical arm of the Department of Energy, reported this afternoon that crude stocks in the world’s largest energy consumer rose by 200,000 barrels last week. This indicated weaker demand for oil.

AdvertisementWhile the rise was nowhere near as large as the 4.3 million rise reported by the American Petroleum Institute on Tuesday, it still confounded initial market predictions for a 1.1 million barrel drop.

Petrol stocks fell by 1.7 million barrels last week, according to the EIA, against expectations for a smaller one million barrel drop, while distillates – which include heating oil – rose by 800,000 barrels compared with predictions for a 300,000 barrel increase.

Oil analysts said a lot of recent positive economic data had already been factored into the price of crude by traders, while global inventories of crude remain at very high levels.