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Crude oil drops below $83

07 January 2010 07:49 (UTC +04:00)

Bakuâ€“ APA-Economics. Crude oil fell in New York, snapping 10 days of gains, on concern the current rally is unsustainable after a U.S. government report yesterday showed an unexpected increase in stockpiles, Bloomberg reported.
Traders are selling contracts to lock in gains from the 15 percent climb in crude prices since Dec. 21. The Energy Department said crude oil inventories rose 1.3 million barrels last week. Stockpiles were forecast to fall, according to a Bloomberg News survey.

Oil for February delivery declined as much as 53 cents, or 0.6 percent, to $82.65 a barrel in electronic trading on the New York Mercantile Exchange. It was at $82.72 a barrel at 13:02 p.m. Singapore time.
Technical indicators used by traders also show that oilâ€™s gains may have come too far, too fast. The 30-day relative strength index was at 60.311 today after reaching 61.226 yesterday. The last time it was above 60 was on Oct. 27. Crude dropped 2.6 percent the next day.
Freezing weather in the U.S., China and Europe supported the 10-day rally in prices.
Brent crude oil for February settlement fell as much as 50 cents, or 0.6 percent, to $81.39 a barrel on the London-based ICE Futures Europe exchange. It was at $81.40 at 12:57 p.m. Singapore time. Prices climbed 1.6 percent to close at $81.89 a barrel yesterday.