Oil prices at US$108 after US inventory data

Standing left to right – Mr. Dinesh Jebamani (Chief Manager Liability Product Management and New Age Media – Seylan Bank), Mr.Sudesh Peiris (Senior Manager – Digital Banking Channels – Seylan Bank), Ms. S.Senevirathne (Representative of the Revenue Department – Western Province), Mr. Tilan Wijeyesekera (Deputy General Manager – Retail Banking – Seylan Bank) and Mr. Malik Wickremanayaka (Deputy General Manager – Operations – Seylan Bank)

LONDON, September 4, 2008 (AFP) – Oil prices fell on Thursday as the market digested the latest weekly snapshot of US energy stockpiles which recorded a bigger than-expected drop.

New York’s main contract, light sweet crude for delivery in October, slipped 50 cents to 108.85 dollars a barrel.

Brent North Sea crude for October dropped 73 cents to 107.33 dollars.

The US Department of Energy (DoE) said crude stockpiles had dropped by 1.9 million barrels in the week to August 29, much bigger than the drop of 300,000 forecast by analysts.

Distillates, which include heating fuel, fell by 400,000 barrels last week, though analysts had expected a bigger drop of 600,000.

Distillates are being watched closely by the market ahead of the northern hemisphere winter.

The latest DoE report was published a day later than usual because of Monday’s Labour Day holiday in the United States.

Prices fell even though most US crude oil production in the Gulf of Mexico remained off-line after refinery outages caused by Hurricane Gustav.

The hurricane’s limited damage to US energy facilities had earlier in the week provided a huge relief and allowed prices to fall s