Light, sweet crude for September delivery fell 93 cents to settle at $74.95 a barrel on the New York Mercantile Exchange after climbing earlier on a drop in crude oil inventories at a key Oklahoma terminal.
September Brent crude lost $1.14 to settle at $75.18 a barrel Thursday on the ICE Futures exchange in London.
Oil prices back off as Dow tumbles
Meanwhile, the Dow Jones industrials closed down more than 310 points, though there was no obvious cataylst behind both markets dropping in tandem, said Tim Evans, an energy analyst at Citigroup in New York.
"The stock market can ignore crude oil for months and months at a time and then react," he said. "They move together, except when they don't."
The oil market's afternoon reversal couldn't be tied to any of the usual price movers, Evans said.
"It's just a giant game of Whack-A-Mole," he said. "It's hard to pin it to any particular fundamental theory or fundamental news story."
U.S. oil surpassed London Brent prices for a while Thursday for the first time in five months. A supply glut at Cushing, Okla. — the delivery point for crude traded on the Nymex — had held U.S. oil unusually lower than the Brent benchmark since February.
The U.S. Energy Department's weekly supply report on Wednesday, however, showed a 1.4 million-barrel decline in oil inventories in and around the Cushing storage point, analysts said.
Thursday's increases renewed speculation that crude futures would resume their challenge of record highs.
"It is still very much a reality that we could see $80 a barrel," said Rob Laughlin of brokerage MF Global. "We haven't seen a storm yet and refineries have shown there is demand for crude out there."
Heating oil fell 3.31 cents to $2.0328 a gallon while gasoline futures dropped 1.20 cent to $2.0759 a gallon. Natural gas prices rose 1.8 cents to $5.943 per million British thermal units.
By JACKIE FARWELL
Blogalaxia Tags: NYMEX