Oil drops largest percentage in 7 years on crude build
NEW YORK (Reuters) - Oil prices slid 12 percent on Wednesday, the largest percentage drop in seven years, after a U.S. government report showed crude inventories rose much more than expected in the world's top energy consumer.
Crude oil stocks swelled by 6.7 million barrels, the U.S. Energy Information Administration said, more than seven times the 900,000-barrel increase analysts had expected.
Gasoline and distillate stocks also rose as refinery utilization climbed and demand remained sluggish.
U.S. crude for February delivery settled at $42.63 a barrel, down $5.95 or 12.25 percent, the biggest single-day loss, percentage-wise, since prices plunged 15.25 percent on September 24, 2001.
London Brent crude settled at $45.86, down $4.67.
"We had pretty large builds in all categories. I think it's a confirmation of the weak demand environment. Any time the market sees physical confirmation of that in inventory building, it's just another reason to move lower, and that's what we're seeing right now," said Amanda Kurzendoerfer, commodities analyst at Summit Energy in Louisville, Kentucky.
Oil demand in the United States, as well as Europe and Asia, has been eroded by the global economic slowdown.
Total oil products demand in the United States in the past four weeks was down 2.9 percent from a year ago, the EIA said.
The bearish data overshadowed Russia's energy dispute with Ukraine and the conflict in Gaza, both of which had supported oil prices early in the week.
While the Gaza conflict did not directly threaten any oil supplies, unrest in the Middle East can bolster prices because countries in the region pump about a third of the world's oil.
Saudi Arabia's foreign minister rejected Iran's call placing an oil embargo on Israel's supporters at a Wednesday news conference in New York.
Russian gas supplies to Europe through Ukraine shut down completely on Wednesday, leaving growing numbers of European Union member states without Russian fuel in freezing mid-winter temperatures.
The dispute, which increased demand for gas oil and lent support to crude, echoes a similar confrontation three years ago that raised questions about Russia's reliability as an energy exporter.
(Additional reporting by Gene Ramos; Joe Brock and Alex Lawler in London; Editing by David Gregorio)
