Oil Prices Top $99 As U.S. Stocks Slide

By Newsroom America Staff at 8 Feb 2012

(Newsroom America) -- Oil prices topped $99 a barrel Wednesday on news that U.S. stocks declined unexpectedly on heightened demand and fears Iran could cut supplies.

By mid-afternoon in Europe, benchmark crude for March delivery was up 90 cents at $99.31 a barrel in electronic trading on the New York Mercantile Exchange. That extended Tuesday's gains, when crude prices jumped $1.50 to settle at $98.41.

Meanwhile, in London, Brent crude rose 42 cents to $116.65 a barrel on the ICE Futures exchange.

The American Petroleum Institute said crude stocks in the U.S. fell by 4.5 million barrels last week, after analysts had predicted a 2.3-million barrel rise.

However, API said, gasoline inventories rose by 4.4 million barrels last week while distillates climbed 386,000 barrels.

Later Wednesday, the Department of Energy's Energy Information Administration will release it's weekly supply data.

Some analysts warned that the sharp reduction in inventories wasn't necessarily attributable to a subsequent boost in demand.

"Keep in mind the Houston Ship Channel saw significant disruptions last week due to fog," which in turn led to lower oil imports, according to The Schork Report. "Thus a large draw is not indicative of strong demand, but of weak imports."

Oil has remained at or near $100 a barrel for the past few months on expectations of an improving U.S. economy over slow global growth.

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