Oil prices drop, but end above US$83

12-Oct-07

An unexpected drop in U.S. crude oil inventories has led to a dip in crude oil futures. Light, sweet crude for November delivery dipped to US$83.04 a barrel in Asian electronic trading on the New York Mercantile Exchange by midmorning in Singapore. The rise in prices has also been supported by a report by International Energy Agency that oil inventories held by the world's largest industrialized countries have fallen below a five-year average, and by concerns that conflict between Turkish forces and Kurdish rebels could affect Iraqi oil supplies. As per the Energy Information Administration, crude supplies fell 1.7 million barrels in the week ended Oct. 5. Demand for gasoline rose last week by about 80,000 barrels, a sign that warm weather may be extending the U.S. driving season. Low levels of inventory of heating oil could pose a concern despite forecasts for a warmer-than-normal U.S. winter.