Oil prices drop on US data

April 26, 2012 | 08:11

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Oil prices fell Wednesday, reversing earlier gains after US data revealed a rise in crude stockpiles and a drop in durable goods orders, as traders awaited the outcome of a Federal Reserve meeting.

Oil prices fell, reversing earlier gains after US data revealed a rise in crude stockpiles and a drop in durable goods orders, as traders awaited the outcome of a Federal Reserve meeting.

New York's main contract, light sweet crude for delivery in June, dipped 18 cents to $103.37 a barrel.

Brent North Sea crude for June dropped 30 cents to $117.86 a barrel in late London deals.

The US Department of Energy said crude stockpiles climbed by a bigger-than-expected four million barrels last week in the United States, the world's biggest consumer of oil -- highlighting current weak energy demand.

Traders said oil prices were also dampened by plunging new orders for US durable goods amid a sharp drop in commercial aircraft orders.

New orders of durable goods, defined as products designed to last at least three years, tumbled 4.2 percent in March from February, the Commerce Department reported.

Elsewhere, Federal Reserve policymakers were weighing their next move on Wednesday amid erratic recovery for the world's biggest economy.

The Fed's interest rate-setting panel is to end two days of meetings with a decision on whether more stimulus is warranted for a recovery that seemed to be gathering steam before it slowed last month.

Fed Chairman Ben Bernanke has sounded more positive about the state of the economy in recent weeks despite high gasoline (petrol) prices, slowing job growth and European debt problems.

"For crude oil, as well as general risk assets, unless there is a material pick up in macro data which seems unlikely, prices could seem a little rich in the absence of additional liquidity," said Jack Pollard, an analyst at Sucden Financial Research.

AFP

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