World oil prices slumped 2.3 percent on Wednesday, tracking a selloff in heating oil futures as worries over tight U.S. stockpiles of distillates eased. U.S. light crude futures fell $1.22 to $52.54 a barrel, reversing an early surge to as high as $55.00. London Brent crude was down $1.08 to $52.05 a barrel. U.S. heating oil futures led the losses, falling 4.80 cents to $1.5528 a gallon on fund selling, Reuters reported. A U.S. government report Wednesday showed commercial inventories of distillates, which include heating oil, diesel, and jet fuel, rose a larger-than-expected 1.3 million barrels last week as refiners focused their production. The build helped to tame concerns that soaring global demand for diesel and jet fuel would lead to a crunch -- a factor that had triggered a nearly 19 percent spike in U.S. heating oil futures since mid-May. "After heating oil led us up, a little bit of relaxation of that fear is leading us down," said Kyle Cooper, analyst at Citigroup Global Markets. The U.S. Energy Information Administration's (EIA) report also said crude stocks in the world's largest energy market fell by 3 million barrels to 330.8 million, pulling them down from near a six-year peak. --More 2309 Local Time 2009 GMT
