Oil prices drop on increasing supplies

Oil prices dropped Tuesday as market expected that a government report Wednesday will show that U.S. crude inventories gained last week. The Energy Information Administration (EIA), the Energy Department's statistical arm, will release its report covering U.S. crude supplies of last week. Markets expected that U.S. crude inventories would continue to rise 3 million barrels to 397.1 million barrels for the week ended April 11. A week ago, the EIA reported an increase of 10 million barrels in crude stockpiles, the largest rise in 13 years. Analysts said that U.S. crude inventories are getting close to 400 million barrels, which is very bearish for the crude prices. Meanwhile, markets closely watched possible new European or U.S. sanctions against Russia over Crimea that may disrupt Russian oil export. On the economic front, U.S. house prices rose in February, with an increase of 0.6 percent on a seasonally adjusted basis from the previous month, beating market expectations, according to the Federal Housing Finance Agency's monthly House Price Index. U.S. existing-home sales slipped 0.2 percent to a seasonally adjusted annual rate of 4.59 million in March, the slowest since July 2012, from 4.6 million in February, according to the National Association of Realtors. Light, sweet crude for May delivery moved down 2.24 dollars to settle at 102.13 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for June delivery lost 68 cents to close at 109.27 dollars a barrel.