Oil prices fall after U.S. data release

Oil prices fall after U.S. data release

SINGAPORE (Reuters): Crude oil prices fell in Asia on Wednesday after U.S. stocks data showed a surprise rise.

Crude stocks increased in the final week of 1999 by 620,000 barrels when a decline of 4.3 million had been forecast.

At 0835 GMT, U.S. February light crude futures were last traded at US$25.30 per barrel, down 25 cents from New York's close.

The American Petroleum Institute (API) issued data late on Tuesday which also showed a stronger than expected reduction in product stocks.

The crude data surprised partly because stocks have traditionally been sharply reduced at the end of the year for tax purposes.

In the five years through 1998, U.S. crude stocks on average have slumped 10.7 million barrels in the final week of the year.

But analysts said stock policies this year were affected by worries about the so-called Y2K bug and OPEC's stringent supply cuts, aimed at keeping 4.3 million barrels per day of crude off world markets.

That meant refineries and other oil companies kept stocks as high as they could, fearing a supply deficit in the first quarter, analysts said.

Regulators and authorities have given the globe's oil sector a clean bill of health with few Y2K related problems spotted.

The U.S. Department of Energy, which is scheduled to release later on Wednesday its own stock data covering the final week of 1999, said that oil stocks were increased by some 17 million barrels as a precaution against potential Y2K bugs. This may be released back into the market place in the weeks ahead.

Weather forecasts see above-average temperatures across the eastern, southern and central regions of the United States in the next six to 10 days, which had undermined prices on Tuesday -- the first full days trading in 2000.