Oil prices fall below US$126 despite drop in US crude stocks as investors eye dollar, demand

Oil prices fell below US$126 a barrel Friday in Asia, extending a decline of more than US$4 in the previous session as a stronger dollar and falling demand outweighed a huge unexpected drop in U.S. crude oil stocks.

The U.S. Energy Department's Energy Information Administration said delays in unloading oil tankers along the Gulf Coast had led to the 8.8 million-barrel drop in crude oil inventories for the week ended May 23, and that explanation helped to lessen the impact of its report. Analysts surveyed by Platts had expected a gain of 750,000 barrels, and usually such a discrepancy would send prices soaring.

"The impact of it was lost," said …