Crude Oil Falls After U.S. Supplies Increase to 16-Month High
By Joshuah at 14 January, 2009, 1:24 pm
Source: Bloomberg.com
Crude oil fell after a U.S. government report showed that stockpiles climbed to a 16-month high as fuel demand tumbled.
Inventories of crude increased 1.14 million barrels to 326.6 million last week, the highest since Aug. 31, 2007, the Energy Department said. Supplies of gasoline and distillate fuel also rose. Fuel demand dropped 6 percent to an average 18.6 million barrels a day, the largest one-week decline since February 2004.
“The inventory report is a reflection of the continued economic slowdown,” said Tom Bentz, senior energy analyst at BNP Paribas in New York. “Demand continues to drop faster than producers can cut back output.”
Crude oil for February delivery fell $1.26, or 3.3 percent, to $36.52 a barrel at 12:54 p.m. on the New York Mercantile Exchange. Prices touched $35.52, the lowest since Dec. 24. Futures are down 61 percent from a year ago.
Oil traded at $37.23 a barrel before the release of the report at 10:30 a.m. in Washington.
Inventories of crude oil were forecast to rise 2.5 million barrels in the week ended Jan. 9, according to the median of 15 analyst estimates in a Bloomberg News survey. The increase last week left stockpiles 10 percent higher than the five-year average for the period, the department said.
Inventories at Cushing, Oklahoma, where oil that’s traded on Nymex is stored, climbed 2.5 percent to 33 million barrels last week, the highest since at least April 2004, when the department began keeping track of supplies there.
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