Oil dropped 2% today, following a rise in US inventories and speculation about tightening Chinese policies to counter inflation.

US crude for March was up 9¢ to stand at $89.71 on Friday, a fall of more than 1.8% this week, while Brent crude for the month rose by 4¢ to $96.62 a barrel after touching $95.43 on Thursday, reports Reuters.

The International Energy Agency is concerned about the potential effect of rising crude prices on the global economic recovery, putting pressure on the Organization of the Petroleum Countries to raise production.

Crude stockpiles rose 2.62 million barrels in the week ending 14 January 2011 against forecasts for a 400,000 barrel drawdown, according to US Energy Information Administration data.

Petrol and distillate stocks rose by 4.4 million barrels and one million barrels, respectively.