Oil prices dropped today as investors worried that the ending of the cold season in the US and Europe is likely to cut demand for heating fuels, which provided a cushion to oil benchmarks during a period of typically low demand.
Brent crude dropped by 30 cents to $109.22 a barrel, while US oil was down by 32 cents to $102.27, reported Reuters.
Crude prices dropped after Energy Information Administration (EIA) data showed that the US stocks of distillates rose by 338,000 barrels to 113.1 million barrels, which indicated a decline in heating fuels demand.
Oil futures were under some pressure after the median forecast of 12 economists revealed China’s official manufacturing purchasing managers’ index (PMI) would drop to 50.1, down from January’s 50.5.
The US dollar went up and held near two-week highs against a basket of major currencies, which weighed on commodities such as oil priced in the currency.
Investors are keenly watching the prolonged crisis in Libya, where oil output has slumped as the government struggles to rein in militias and improve law and order in the country.
EIA data also showed that US gasoline inventories fell 2.8 million barrels, much more than expected with the return of mild weather.
The Gulf Coast imports fell slightly as shipments were delayed due to foggy weather.
Image: The US distillates stocks rose 338,000 barrels to 113.1 million barrels. Photo: courtesy of FrameAngel.