U.S. crude below US$106 on supply data, global crude rises on Iraq violence

The price of U.S. crude oil fell below US$106 per barrel Wednesday for the first time in a week on higher than expected supplies, but global crude rose to a nine-month high as an offensive by militants in Iraq continued.

Benchmark West Texas Intermediate crude for July delivery fell 39 cents to close at US$105.97 in New York.

Brent crude, a benchmark used to price international oil used by many U.S. refiners, rose 81 cents to close at US$114.26 a barrel in London, its highest level since September.

Brent’s increase was fuelled by an attack by insurgents on Iraq’s largest oil refinery. The refinery makes fuel for local consumption and none of the violence has threatened crude oil production or exports. But the upheaval is casting a shadow over future crude supplies from the country, which has been rebuilding its energy infrastructure.

In the United States, the Energy Department reported that supplies dropped by 600,000 barrels last week, much less than the decline of 1.4 million barrels expected by analysts, according to Platts, the energy information division of McGraw-Hill.

In other energy futures trading on the Nymex, wholesale gasoline rose 0.7 of a cent to US$3.098 a U.S. gallon (3.79 litres), heating oil rose 2.2 cents to US$3.040 a gallon and natural gas fell five cents to US$4.659 per 1,000 cubic feet.

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