Oil prices fall slightly in Asia

Oil prices fell Wednesday as traders balanced a 4.7 percent leap the day before and awaited the release of U.S. energy supply data later in the day.

Light, sweet crude for March delivery dropped 18 cents to $54.86 in midmorning Asian electronic trading on the New York Mercantile Exchange. Trading was low ahead of the weekly crude inventories report.

"Any unexpected gain in stocks may trigger a large sell-off," said Koichi Murakami, an analyst with brokerage Daiichi Shohin in Tokyo.

On Tuesday, prices leaped $2.48, or 4.7 percent, to settle at $55.04 after the U.S. government announced plans to boost the United States' emergency crude stockpile this spring at a rate of 100,000 barrels per day.

The Department of Energy said it plans to increase the capacity of the Strategic Petroleum Reserve to 1.5 billion barrels from 691 million barrels. The announcement raised the prospect of increased demand, leading to the largest one-day jump in price since Sept. 19, 2005.

Last week, the U.S. Energy Department reported the biggest increase in crude inventories in more than four years, which suggests energy prices may have further to fall despite Monday's initial bounce. It said crude oil stockpiles rose by 6.8 million barrels to 321.5 million barrels in the week ended Jan. 12.

Growing crude inventories and unusually warm weather in the United States dragged oil prices below $50 a barrel last week for the first time since May 2005. But prices rallied Monday following a weekend storm, and seasonable temperatures persisted Tuesday as a cold front moved into the north-central U.S.

In other Nymex trading, heating oil futures dropped marginally to $ 1.5750 a gallon, while natural gas rose 1.8 cent to $7.615 per 1,000 cubic feet.