Crude oil futures dropped from their two-week high rally as reports emerged about a major increase in U.S. stockpiles, which are estimated to be the highest since June.
Oil futures for delivery in November dropped 59 cents, or 0.7 percent, to trade at $82.49 a barrel in electronic trading on the New York Mercantile Exchange. They were trading at $82.83 a barrel at 9:13 a.m. London time. December contract, which saw greater active trading, dropped 65 cents, or 0.8 percent, to trade at $83.15. Brent crude contract for December settlement shed as much as 79 cents, or 0.9 percent, to trade at $83.58 a barrel on the ICE Futures Europe exchange.
Futures gained as much as 2.3 percent yesterday on speculations that the U.S. Energy Department would announce the surge in crude inventories to be as high as 1.5 million barrels in the last week. The report will be released on Wednesday.
Last week's report said the U.S. refineries operated at 81.9 percent of capacity in the week ended Oct. 8, which is the lowest since March. It also estimated the fall in gasoline stockpiles to be as high as 1.4 million barrels, or 0.6 percent, to a new estimate of 218.2 million barrels.
Oil prices may fluctuate on news from France where union workers launched a strike to protest the expected raise in the retirement age by President Nicolas Sarkozy. There were reports of blocked fuel supplies and shortages in some cities and this may impact the gasoline prices in the coming days.
