Oil prices slump on soaring US energy inventories

11th May 2011, Comments 0 comments

World oil prices tumbled Wednesday after the United States said its crude inventories had surged last week, indicating weak energy demand in the world's biggest economy.

Brent North Sea crude for delivery in June slid $2.83 to $114.80 a barrel in late London deals.

New York's main contract, light sweet crude for June, shed $3.09 to $100.79 a barrel.

In the United States, the world's biggest consumer of oil, the Department of Energy (DoE) announced that the country's crude stockpiles grew by 3.8 million barrels in the week to May 6, far higher than had been expected by analysts.

It added that gasoline, or petrol, inventories grew by 1.3 million barrels.

"US DoE statistics for the week ending 6 May 2011 appear mediocre, showing an increase in crude oil stocks and very poor product demand," said Christophe Barret, an oil analyst at Credit Agricole CIB.

Despite sliding, crude oil futures remain at elevated levels and the high prices helped increase the US trade deficit in March, official data showed on Wednesday.

The deficit rose to $48.2 billion in March, up from $45.4 billion in February. More than half of a $10.4 billion surge in imports came from energy products, as crude prices shot up on the back of turbulence in oil-producing Arab countries.

Elsewhere on Wednesday, the OPEC cartel held its forecast for world oil demand growth this year, saying rising consumption in China would make up for the uncertain outlook in the United States and in quake-hit Japan.

"World oil demand is forecast to grow by 1.4 million barrels per day (bpd) in 2011, broadly unchanged from the previous report," the Organization of Petroleum Exporting Countries (OPEC) said in its monthly market report.

© 2011 AFP

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