OIL prices dropped yesterday after the government said US supplies grew more than expected last week.

Benchmark West Texas Intermediate crude fell US$1.53 to finish at US$102.67 per barrel in New York, while Brent crude lost 81 cents to end at US$117.97 per barrel in London.

The Energy Information Administration reported that US crude oil supplies grew by 3.9 million barrels last week. Analysts expected an increase of 400,000 barrels. The government's weekly report also said that US oil demand dropped 2.7 percent, gasoline demand fell 2.8 percent, compared with a year ago.

The data suggest that US motorists aren't filling up as much ahead of the summer driving season.

"You continue to see some pretty anemic fuel demand levels" in the US, said Gene McGillian, a broker and oil analyst at Tradition Energy.

US retail gasoline prices dipped slightly to a national average of US$3.899 per gallon (about US$1 a liter), according to AAA, Wright Express and Oil Price Information Service. The national average has declined by 2.6 cents this month, and it's now it's just barely under US$3.90 for the first time since March.

Experts say that gasoline prices have leveled off this month, but they're likely to rise to around US$4 per gallon (US$1.05 a liter) during the next few weeks as more refiners switch to producing summer blends of fuel.

In other energy trading, heating oil gave up less than a penny to finish at US$3.1182 per gallon and gasoline futures lost 3.13 cents to end at US$3.2027 per gallon. Natural gas futures were unchanged at US$1.9510 per 1,000 cubic feet.

Source:shanghaidaily.com