Oil down on API demand report

24 March 2010

Written by Kim Bardsley

Crude oil prices dropped on the New York Mercantile Exchange this morning (March 24th) after a report from the American Petroleum Institute (API) revealed further weakness in demand for crude products.

In a report published yesterday, the group showed a 7.5 million-barrel build in crude inventories for the week ending March 19th, marking the eighth consecutive week of climbing stocks.

Although analysts had been anticipating a further rise, the size of the inventory build caught many off guard. It was more than five times the size of that predicted by analysts in a poll conducted by Reuters.

Reacting to the markets, traders sent both crude and heating oil lower, with the former teetering above $81 (£54) a barrel as European markets opened.

The markets will now be looking ahead to a report from the Energy Information Administration (EIA) later today for a corroboration of the API figures.

The EIA, funded by the US Energy Department, is generally thought to provide a more extensive survey of true demand conditions throughout the country.

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