Oil plunges 2 dollars on U.S. high inventories

08:29, January 21, 2011      

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Crude oil price plunged Thursday on unexpected jump of U.S. crude oil inventories.

The Energy Information Administration (EIA) said U.S. crude stocks rose 2.62 million barrels in the week ended Jan. 14, compared with a drop of 2.2 million barrels a week earlier. This result came far beyond the expectations of a 600,000 barrel draw.

According to EIA, a rise in imports, to their highest level in six weeks, helped feed the build. Product stocks also rose with gasoline, fed by higher production, up for a third straight week and distillates up for a fourth straight week.

Supply surge made investors and traders shrug off the U.S. positive job and house market data and trim the contracts.

Light, sweet crude for February delivery dropped 2 dollars, or 2.20 percent, to 88.86 dollars a barrel on the New York Mercantile Exchange.

Source: Xinhua
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