Oil fluctuates near $131 a barrel after 8.8 mln bbl drop in U.S. crude stocks

LONDON (Thomson Financial) – Oil prices fluctated near $131 a barrel on Thursday afternoon in London, after a massive 8.8 million barrel drop in U.S. crude inventories reversed most of the earlier losses.

Crude prices rocketed higher to move above $133 a barrel in the immediate aftermath of the weekly report from the Energy Information Administration — the statistical arm of the Department of Energy — as traders shocked by the size of the drop poured into the market.

However, with the EIA keen to emphasise the surprise drop was due to “temporary delays in crude oil tanker off-loadings on the Gulf Coast,” crude prices quickly retraced.

Citigroup analyst Tim Evans said: “The big 8.9 million barrel drop in crude stocks came on a combination of lower imports and higher crude runs and was focused on the Gulf Coast. Overall, it just looks like the low imports are the cause of the surprise.”

Market expectations had been for a small rise in U.S. crude stocks.

Thomson Financial