Oil prices drop on rising US energy inventories

Written by: Pti
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London, Jan 11: Oil prices slipped today after official data revealed that crude inventories rose by much more than expected in the United States last week, but losses were limited by tensions over Iran and unrest in Nigeria.

New York's main contract, West Texas Intermediate crude for delivery in February, fell 56 cents to USD 101.68 a barrel. Brent North Sea crude for February dipped 24 cents to USD 113.02 in late London deals.

The US Department of Energy said that crude stockpiles jumped by five million barrels last week in the world's biggest oil consumer -- five times the amount forecast by analysts. Ahead of the data, prices were mixed as traders continued to track events in Iran amid fears that the Islamic republic could decide to halt its oil exports to the West.

Iran has threatened to close the strategic Strait of Hormuz should the West go ahead with plans to slap a ban on imports of Iranian oil as part of sanctions to stop the country's disputed nuclear programme. Hormuz links the Gulf with the Gulf of Oman -- through which much of the region's oil is transported.

Traders were also closely following mounting unrest in Nigeria, which is another major crude oil producer and exporter. Tens of thousands of protesting Nigerians defied an order to end a three-day-old strike today as unions threatened oil production and a mob rampaged in one city, leaving a police officer dead.

The strike and protests over soaring fuel prices sank Africa's largest crude producer and most populous nation further into crisis, with deadly religious violence having sparked talk of a looming civil war. 


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