PETROL futures plunged today, pulling the price of oil with it, after an unexpected rise in US inventories.
The drop was so steep that it triggered a rare five-minute halt of all energy trading on the New York Mercantile Exchange for the first time in more than two years.
June reformulated petrol blendstock dropped 7.6 per cent, the biggest one-day percentage decline since February 2009.
Light, sweet crude oil for June delivery settled down $US5.67, or 5.5 per cent, to $US98.21 a barrel on the Nymex. Brent crude oil on the ICE futures exchange settled down $US5.06, or 4.3 per cent, to $US112.57 a barrel.
While petrol futures began the session lower, their slide steepened after the Energy Information Administration posted a surprise increase in US inventories, signalling slackening demand.
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"We went from anticipating a drop in gasoline inventories for last week to seeing a build instead," said Tim Evans, energy analyst at Citi Futures Perspective.
"That certainly sparked some selling out of the gasoline market."
The decline in petrol futures triggered a rare five-minute halt to energy trading, after the contract hit its daily trading limit of US25 cents. The limit was raised to US50c after trading resumed
All of the contracts revert to their old trading limits later today. Contracts trading on the ICE don't have trading limits and trading on that exchange wasn't halted, a spokesman said.
Energy trading on the Nymex was last halted on September 22, 2008, due to a surge in crude-oil prices.
Although the EIA report triggered the initial sell-off in petrol, the decline gathered significant momentum as the session went on.
Market participants said traders took profits off the table after petrol's steep climb in the previous session, exacerbating the decline. Petrol's premium over crude oil, called the "gas crack," hit a record $US38 a barrel yesterday before plunging more than $US5 today.
"You're seeing...profit-taking from people who did catch the move on the run-ups in the cracks," said Raymond Carbone, a floor broker and president of Paramount Options in New York.
Crude oil inventories rose 3.8 million barrels last week, the EIA said, exceeding analyst estimates. Supplies of distillates, including heating oil and diesel, fell 843,000 barrels.
The data suggest that demand for crude oil and petrol is softening ahead of the critical northern summer driving season.
The EIA report also said stockpiles in Cushing, Oklahoma, rose 1.1 million barrels to a near-record 41.6 million barrels.
Rising inventories at the key oil hub and Nymex delivery point have been depressing the price of the main Nymex crude oil contract this year. The discount of the Nymex's light, sweet crude-oil contract to Brent crude oil rose to above $US14 a barrel today.
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