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Oil continues to retreat ahead of release of U.S. crude data

By: Pamela Sampson, The Associated Press

Thursday, Feb. 21, 2013 at 12:25 AM | Comments: 0

In this March 6, 2012 photo a pumping unit sucks oil from the ground near Greensburg, Kan. THE CANADIAN PRESS/AP, Charlie Riedel

BANGKOK - Oil fell below US$95 a barrel Thursday as disagreement among U.S. Federal Reserve officials about its super easy monetary policy weighed on prices ahead of the release of a report on U.S. crude inventories.

Benchmark crude for April delivery was down 89 cents to $94.33 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract lost $1.88, or 2 per cent, to finish at $95.22 a barrel on the Nymex on Wednesday.

Oil prices were undercut by expectations for higher U.S. crude supplies when the Energy Department's Energy Information Administration releases its weekly inventory report later Thursday.

Carl Larry of Oil Outlooks and Opinions forecast a rise of 1.5 million barrels.

"An increase in inventories here may seem like the best thing with refineries cutting runs, but we're cutting our imports and increasing our domestic production," he said in an email commentary. Ample supplies tend to lower prices.

Brent crude, used to price many international varieties of oil imported by U.S. refineries, fell 53 cents to $115.07 a barrel in London.

Oil prices were also weighed down by a transcript of the latest Federal Reserve meeting that showed some policy-makers expressing doubts about the Fed's bond-buying program. If the Fed curtails or ends the program earlier than anticipated, that could strengthen the dollar. Oil prices tend to move inversely against the dollar.

In other energy futures trading on the Nymex:

— Heating oil fell 1.1 cents to $3.142 per gallon.

— Wholesale gasoline fell 1.7 cents to $3.242 per gallon.

— Natural gas fell 2 cents to $3.259 per 1,000 cubic feet.

(TSX:ECA, TSX:IMO, TSX:SU, TSX:HSE, NYSE:BP, NYSE:COP, NYSE:XOM, NYSE:CVX, TSX:CNQ, TSX:TLM, TSX:COS.UN, TSX:CVE)

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