Oil prices fall below 71 dollars
Oil prices fell under 71 dollars on Wednesday as traders reacted to news of a spectacular jump in US crude reserves that signalled weaker demand in the world's biggest energy-consuming nation.
New York's main contract, light sweet crude for October delivery, tumbled to a three-month low at 70.76 dollars. It later pulled back to stand at 71.53 dollars, down 10 cents from Tuesday's closing level.
London's Brent North Sea crude for October rose 26 cents to 72.64 dollars a barrel, having earlier fallen to a seven-week low at 71.75 dollars.
US crude oil inventories soared by 4.1 million barrels in the week ending August 20, confounding market expectations for a drop of 200,000 barrels, according to analysts polled by Dow Jones Newswires.
Stockpiles of gasoline or petrol rose 2.3 million barrels, trumping forecasts for a 500,000-barrel decline.
And distillates, including diesel and heating fuel, gained 1.8 million barrels. Analysts had pencilled in a smaller gain of 900,000 barrels.
"The US ... published very weak statistics for the week," noted energy analyst Christophe Barret at Credit Agricole CIB.
The market has been undercut this week by amid mounting jitters over the strength of the global economic recovery and fell further on Wednesday after yet another batch of poor US economic data.
"The downtrend (for oil) remains intact," said analyst Andrey Kryuchenkov at Russian financial services group VTB Capital.
US new home sales unexpectedly plunged in July to the lowest level since 1963, government data showed Wednesday, reflecting the sinking housing sector.
July sales of new single-family houses slumped 12.4 percent from June to 276,000, breaking below 300,000 for the first time in the data's 47-year history and baffling most economists who had expected sales to rise to 334,000.
The latest data came a day after existing US home sales -- considered the core of the residential real estate market -- plunged a whopping 27.2 percent in July to levels unseen in more than a decade.
"The shaky global economy continues to put pressure on crude prices," said Victor Shum, analyst at Purvin and Gertz energy consultants.
© 2010 AFP