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Oil prices drop below $94 a barrel in Europe trade
Thursday - 2/21/2013, 9:30am EST
The price of oil continued falling and was below $94 a barrel Thursday on signs some Federal Reserve officials are uncomfortable with the current super easy monetary policy and ahead of the release of a report expected to show a rise in U.S. crude inventories.
By early afternoon in Europe, benchmark crude for April delivery was down $1.44 to $93.78 a barrel in electronic trading on the New York Mercantile Exchange. On Wednesday, the contract lost $1.88, or 2 percent.
Oil prices were weighed down by a transcript of the latest Fed meeting that showed some policymakers expressing doubts about the central bank's bond-buying program. If the Fed curtails or ends the program earlier than anticipated, that could affect economic growth.
Analysts say that ending the supply of new money to the economy would also deprive some investors of cash to use speculatively in markets such as crude oil.
"The extremely high trading volume on the oil market ... suggests that financial investors, and allegedly even a hedge fund, have liquidated long positions," said a report from Commerzbank in Frankfurt.
Oil prices were also weighed down by expectations that the Energy Department's weekly inventory report to be released later Thursday will show an increase in U.S. crude supplies.
Data for the week ending Feb. 15 is expected to show a build of 2 million barrels in crude oil stocks and a draw of 1.4 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos. Ample supplies tend to lower prices.
Brent crude, used to price many international varieties of oil imported by U.S. refineries, was down $1.61 to $113.99 a barrel in London.
In other energy futures trading on the Nymex:
-- Heating oil retreated 3.73 cents to $3.1149 per gallon.
-- Wholesale gasoline was down 6.95 cents to $3.189 per gallon.
-- Natural gas dropped 1.3 cents to $3.266 per 1,000 cubic feet.
Pamela Sampson in Bangkok contributed to this report.
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