Crude oil prices dropped sharply in late New York trading on Tuesday after the Wall Street Journal reported that American Petroleum Institute data tomorrow would show a much larger than expected addition to U.S. crude stockpiles.
West Texas Intermediate, the American standard, had been as much as 6.8 percent higher than yesterday's close of $30.34. But WTI had already slipped more than a dollar from its $32.41 intra-day high to $31.16 when the WSJ story hit the market.
US oil inventories increased by 11.4 million barrels in the latest week, according to the Journal's source. In the prior week of January 15th inventories rose by 3.979 million barrels. It was the largest single week rise in inventories in almost 20 years. The government reports on weekly inventories is due Wednesday at 10:30 a.m. ET.
WTI dropped almost immediately to $30.69 after the report and continued lower to $30.30. Brent crude, the global standard was up 63 cents, or 2.06 percent above yesterday's close of $30.50 at $31.13 a barrel after the report.
Tuesday's price gains were based on speculation that oil producers, OPEC and others, though not U.S. shale drillers, were closer to an agreement to restrict output in the face of one of the biggest supply gluts in decades.
Chief Market Strategist
WorldWideMarkets Online Trading