Oil Prices Drop Below $80

22 February 2010 (Last Updated February 22nd, 2010 18:30)

Oil prices dropped from six-week highs to $80 a barrel today as forecasts for higher US oil and petrol stockpiles counterbalanced concerns that a strike at Total's French refineries would cause fuel shortages. For April delivery, US crude fell 25¢ to $80.06 a barrel by 0555 GMT, w

Oil prices dropped from six-week highs to $80 a barrel today as forecasts for higher US oil and petrol stockpiles counterbalanced concerns that a strike at Total's French refineries would cause fuel shortages.

For April delivery, US crude fell 25¢ to $80.06 a barrel by 0555 GMT, while London ICE Brent dropped 33¢ to $78.28, reports Reuters.

The contract for US crude for March delivery, which expired on Monday, rose 35¢ and settled at $80.16 a barrel amid a flurry of late short-covering and aided by rising petrol futures.

It is the highest intra-day price for a front-month contract since 13 January after six days of walkouts at the French refineries.

According to a Reuters poll, crude stockpiles in the US reported a fourth consecutive week of gains last week as imports grew, while petrol supplies rose for the third week in a row.

US crude inventories rose 1.9 million barrels and petrol stockpiles added 500,000 barrels in the week ended 19 February.

The continued strikes would close more than half of France's oil refining capacity and as a result would reduce output by more than one million barrels per day in French refinery capacity out of a total capacity of 2 million barrels per day.