US crude oil dropped 7% on Wednesday after a weekly government report showed US crude supplies rose by 700,000 barrels last week instead of the 1m barrel decrease expected by analysts.
US light crude oil for April delivery settled down $3.38 to $42.33 a barrel on the New York Mercantile Exchange.
Concern about a continuing slump in demand weighed on crude prices after a separate report from China showed a surprise 15% decline in February imports as demand continues to slow.
Meanwhile the US government report showed gasoline inventories fell by 3m barrels more than double than the 1.2m barrels reduction expected.
Expectations that oil cartel OPEC will call for another round of output cuts had little effect. OPEC is scheduled in meeting 15 March in Vienna.
Among precious metals gold rose back above the key $900 an ounce level as the dollar boosted the yellow metal’s appeal as an alternative investment. COMEX gold for April delivery rose $14.80 to settle at $910.70 an ounce.
May silver rose 26 cents to $12.80 an ounce while May copper fell 6 cents to $1.63 a pound.
