Oil dips below $77 on U.S. crude stock rise

By Edward McAllister

NEW YORK (BestGrowthStock) – Oil fell below $77 a barrel on Wednesday after U.S. data showed a rise in crude inventories, raising concerns about continued flagging demand in the world’s largest energy consumer.

U.S. crude for March delivery fell 25 cents to settle at $76.98 a barrel. London ICE Brent crude fell 14 cents to settle at $75.92 a barrel.

U.S. commercial stockpiles of crude jumped by 2.3 million barrels last week, far surpassing analysts’ forecasts for a 200,000 barrel increase, the Energy Information Administration (EIA) said on Wednesday.

The numbers confirmed Tuesday’s data from trade group American Petroleum Institute, showing national crude oil inventories up a whopping 4.7 million barrels.

“The EIA crude build is particularly bearish in light of poor demand. Total products demand in the four weeks to January 29 was down from a year ago and that’s very disappointing,” said Andy Lebow, broker at MF Global in New York.

U.S. refinery utilization rates were off 0.8 percentage points at 77.7 percent of capacity last week — their lowest level since 1990 barring hurricane disruptions.

Gasoline prices, however, rose after a reported 1.2 million-barrel decline.

“The gasoline draw was counter-seasonal and looks supportive,” said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.

Investors have looked to wider economic data over the past year for signs of economic recovery and a potential rebound in energy demand.

On Wall Street, U.S. stocks (Read more about the stock market today. ) fell after President Barack Obama reiterated his commitment to overhaul the healthcare system and tighten regulations on the financial sector.(.N: )

The dollar rose against the euro as mounting worries about Portugal’s economy weighed on the euro. A stronger greenback makes commodities priced in dollars more expensive for those holding other currencies.

Analysts also are keeping a close watch on Iran. The world’s fifth-largest oil exporter said it had launched a domestically made satellite-carrier rocket carrying live animals into low-Earth orbit, a move that may fan concern about Tehran’s nuclear intentions.

Western powers accuse Iran of trying to develop nuclear weapons under a civilian enrichment program that Tehran says will fuel a future network of nuclear power plants that will free up domestic oil and gas for export.

In a report late on Tuesday, the American Petroleum Institute said U.S. crude stocks jumped by 4.7 million barrels last week. That compared with an average forecast gain of 200,000-barrel in a Reuters poll.

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(Additional reporting by Chris Doering, Robert Gibbons and Gene Ramos in New York and Chris Baldwin and Christopher Johnson in London; Editing by David Gregorio)

Oil dips below $77 on U.S. crude stock rise