Oil fell this morning after traders wrote off a sharp fall in US crude inventories to the short-term impact of Gulf Coast shipping disruptions.
US light crude for February fell 48 cents to $63.24 a barrel by early this morning, after having touched a three-month high above $64 a barrel last night. London Brent February crude fell 35 cents to $62.88.
US inventory data yesterday showed that crude stocks fell 6.3 million barrels, a much steeper drop than the 1.7 million barrel slip analysts expected. Gasoline and distillate stockpiles rose moderately.
Dealers had anticipated some decline in stocks after fog caused intermittent delays on the Houston Ship Channel, the waterway feeding the nation's busiest oil and petrochemicals port, which led to a drop in weekly imports.
The channel was open yesterday afternoon, and the number of ships queueing to transit fell, although officials warned that heavy fog could force it to close in the evening.
Dealers said the market had already factored in the effects of shipping delays and saw little scope for further gains as dealers shied from taking fresh positions ahead of the holidays.