Oil price falls as US stocks rise

Oil prices are almost $20 below July's peak of $78.40 a barrel

An increase in US stockpiles of crude oil and gasoline has triggered a drop in oil prices.

The US Energy Department said crude oil inventories rose by 5.1 million barrels to 341.1 million last week, 6.6% higher than at the same time last year.

US light sweet crude fell 93 cents to end at $59.24 a barrel. In London Brent crude closed 90 cents down at $59.4.

Oil has held at about $60 a barrel in recent days on uncertainty over whether oil cartel Opec will cut production.

Milder winter

"The market seems to have stabilised a bit, at least in the short term," said Tony Nunan, at Mitsubishi's petroleum business.

A mild US winter and an increase in stocks of heating oil have kept prices from rising in recent weeks.

The latest figures showed that heating oil stock piles fell by just 10,000 barrels from 60.2 million, after rising in the two previous weeks.

News that seven workers from an Italian oil supply vessel off Nigeria's coast had been taken hostage did not have the sort of impact on the market that similar events had a few months ago.

Earlier in the year, news of oil workers being taken hostage in Nigeria and concerns over sanctions against Iran had pushed oil to record highs.

However, after breaching the $78 mark in mid-July, oil prices have settled into a range between $58 and $62 a barrel since October.