Oil falls to near $81 on US crude supplies jump

[March 24, 2010]  SINGAPORE (AP) -- Oil prices fell to near $81 a barrel Wednesday in Asia after a report showed a larger-than-expected jump in U.S. crude inventories last week.

Benchmark crude for May delivery was down 70 cents to $81.21 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract gained 31 cents to settle at $81.91 a barrel on Tuesday.

Oil supplies in the U.S. have risen sharply in recent weeks, belying a slow but steady overall economic recovery and suggesting consumer demand remains weak.

Crude inventories jumped last week by 7.5 million barrels, the American Petroleum Institute said late Tuesday. Analysts had expected an increase of 1.7 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Inventories of gasoline and distillates fell, the API said.

The Energy Department's Energy Information Administration is scheduled to announce its supply report later Wednesday.

In other Nymex trading in April contracts, heating oil fell 1.33 cents to $2.084 a gallon, and gasoline slid 2.23 cents to $2.241 a gallon. Natural gas dropped 2.8 cents to $4.102 per 1,000 cubic feet.

In London, Brent crude was down 62 cents at $80.08 on the ICE futures exchange.

[Associated Press; By ALEX KENNEDY]

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.