Oil prices drop as US reports jump in crude inventories

Global crude prices fell on Wednesday, reversing early gains, as the United States revealed a surprise jump to its crude stockpiles, traders said. Prices were also downbeat amid persistent concerns over the eurozone debt crisis, they added. Brent North Sea crude for delivery in September fell 60 cents to $102.82 a barrel in late London deals. New York's main contract, light sweet crude for September, dropped $1.22 to $87.28 a barrel. The US Department of Energy announced that crude stockpiles rose by 2.7 million barrels last week, indicating weak demand in the world's biggest consumer of oil. Analysts had forecast a drop of 800,000 barrels. World oil prices had rebounded Tuesday on encouraging Chinese manufacturing data. They had plunged by more than $3.50 on Monday as eurozone debt strains, centred on Spain, pointed to future weak demand for the commodity. The oil market hit two-month highs last week as traders worried that rising tensions in the crude-rich Middle East -- particularly in Iran and Syria -- would hamper supplies.