Oil prices fell by around $2 a barrel this evening as concerns about high US inventories and Chinese inflation outweighed positive US jobless data. US crude fell by $2.35 to $88.51 a barrel, while Brent was down $1.80 at $96.36.
The March spread between the two grades hovered close to $7 as the unusually wide Brent premium persisted following figures from the US Energy Information Administration (EIA).
These showed that US crude stockpiles unexpectedly rose 2.62 million barrels in the week to January 14. analysts had expected a drop in inventory levels. A rise in stockpiles is a sign of weaker energy demand.
The oil market had already been in negative territory for most of the day, but losses were modest until after the start of US trading when crude began plunging.
Stronger than expected Chinese growth data sparked concern about tighter monetary policy, prompting a sell-off in equities led by emerging markets.
