Oil prices fell to below $99 a barrel Wednesday in Asia after a report showed U.S. crude supplies rose unexpectedly last week, suggesting demand may remain weak.
Benchmark crude for December delivery was down 80 cents at $98.57 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.23 to settle at $99.37 in New York on Tuesday.
Brent crude for January delivery slumped 57 cents to $111.61 a barrel on the ICE Futures Exchange in London.
The American Petroleum Institute said late Tuesday that crude inventories added 1.3 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted a drop of 1.5 million barrels.
Inventories of gasoline fell 2.9 million barrels last week while distillates dropped 2.6 million barrels, the API said.
The Energy Department’s Energy Information Administration reports its weekly supply data later Wednesday.
Crude has surged from $75 in early October amid growing investor optimism that the U.S. economy will avoid a recession this year. The Commerce Department said Tuesday that retail sales rose in October for the fifth straight month.
“Market momentum remains heavily skewed toward the upside,” energy consultant Ritterbusch and Associates said in a report. “We still expect an advance into the $100-102 zone as early as Wednesday.”
Traders will also be closely watching the latest figures on industrial production and housing this week.
In other Nymex trading, heating oil fell 0.7 cent to $3.16 per gallon and gasoline futures slid 0.7 cent to $2.59 per gallon. Natural gas dropped 0.2 cent at $3.40 per 1,000 cubic feet.