Oil prices sank this afternoon as investors locked in recent profits and reacted to news of a lighter than expected drop in crude reserves in top energy consumer the US.
Brent North Sea crude for delivery in October dived $1.04 to $75.89 a barrel in London trade. New York's main contract, light sweet crude for September, shed $1.27 to $74.50.
Prices had jumped yesterday to snap five days of losses in a row on the back of a weaker dollar and rising equities.
But the market fell again today as many traders took profits and the US government's Department of Energy revealed that American crude reserves declined by 800,000 barrels in the week ending August 13.
That dashed expectations for a 1.3 million barrel weekly drop by analysts. It also appeared to indicate weaker than expected demand for energy.
The Department of Energy added that petrol inventories were flat last week, while analysts had predicted a drop of 500,000 barrels. The weekly US report is closely watched by the oil market because the country is the world's biggest energy consumer, with China and Japan in second and third place respectively.
