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Oil prices drop on expected rise in US inventories

Oil prices fell on the eve of US stockpiles data, with most traders forecasting a rise in supplies in the world's largest consumer of crude oil.

NEW YORK: Oil prices fell on Wednesday on the eve of US stockpiles data, with most traders forecasting a rise in supplies in the world's largest consumer of crude oil.

The US benchmark, West Texas Intermediate for delivery in July, dropped $1.39 to close at $102.72 a barrel on the New York Mercantile Exchange.

Brent North Sea crude for July settled at $109.81 a barrel, down 22 cents from Tuesday's close, in London.

The New York market saw profit-taking ahead of the Department of Energy's weekly inventories report due Thursday, said Gene McGillian of Tradition Energy.

The DoE report normally is released on Wednesdays but was delayed because of a holiday on Monday.

In last week's report, US crude stockpiles unexpectedly fell by 7.2 million barrels, signalling to traders improved demand.

But this time traders are expecting "a small build" of one million barrels after the sharp decline that was viewed as "probably a one-week thing," McGillian said.

Except for the surprise decline last week, crude inventories have climbed almost non-stop since the beginning of the year as the country's oil production ramps up.

At the end of April the inventories hit 399.4 million barrels, the highest level since 1931.

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