Oil prices fell today after a cold snap in the United States failed to trigger a long-awaited boost in fuel demand in the world's largest heating oil market.
US crude futures tumbled 52 cents to $54.52 a barrel today to cut into some of yesterday's $2.46 gain. London Brent crude eased 35 cents to $54.75.
Icy winter weather finally arrived in the US Northeast last week, but demand remained subdued.
US distillate demand, which includes heating fuel, fell 4.1 per cent in the past four weeks, compared with a year ago, the Energy Information Administration (EIA) said today.
Distillate stocks rose by 700,000 barrels, confounding analysts' expectations for an 800,000-barrel decline.
Domestic crude stocks rose 700,000 barrels, while gasoline inventories climbed 4 million barrels. EIA's bearish data helped offset some of the previous session's sharp gains.
Oil prices jumped 4.7 per cent yesterday, the biggest daily gain since November 20th, on news the United States will increase its emergency oil reserves.
