Oil drops on commodities sell-off, stocks retreat
NEW YORK (AP) — The price of oil fell Wednesday, as a drop in metals commodities overflowed to crude markets and stocks retreated from five-year highs.
Benchmark crude for April delivery dropped $2.14, or 2.2 percent, to $94.96 a barrel in midday trading on the New York Mercantile Exchange. The March contract, which expires Wednesday, fell $2.07 to $94.59 per barrel.
Brent crude, used to price many international varieties of oil imported by U.S. refineries, fell $1.54 to $115.98 a barrel in London.
Gold and other precious metals tumbled in Wednesday trading, and oil was dragged down by the commodities sell-off. Gold was down about $22 to $1,582.40 an ounce. Silver was off more than 2 percent and platinum lost more than 3 percent.
The stock market backed off on Wednesday as well, with the major indexes slightly lower at midday.
The Commerce Department said housing starts slowed in January from December, although applications for building permits continued to rise, pointing to more recovery for the housing market this year. Many analysts expected the decline in January starts after a sharp rise in December, with most of the drop in apartment construction. Single-family home starts were slightly higher last month.
Oil prices were undercut by analysts' expectations for higher U.S. crude supplies when the Energy Department's Energy Information Administration releases its weekly inventory report on Thursday. Analysts on average forecast a rise of 2 million barrels, according to Platts, the energy information arm of McGraw-Hill Cos.
In other energy futures trading on the Nymex:
— Heating oil fell 3 cents to $3.15 per gallon.
— Wholesale gasoline fell 6 cents at $3.06 per gallon.
— Natural gas rose 1 cent to $3.28 per 1,000 cubic feet.
Martin Crutsinger in Washington, Pamela Sampson in Bangkok and Pablo Gorondi in Budapest contributed to this report.