Oil prices drop sharply as U.S. supplies increase
Last Updated: Thursday, November 6, 2008 | 7:44 AM MT
CBC News
Oil prices fell by more than $5 a barrel on Wednesday as U.S. stockpiles of fuel grew.
On the New York Mercantile Exchange, the price of crude oil for December delivery dropped by $5.23 US to settle at $65.30 a barrel.
The retreat came after the U.S. government's Energy Information Administration said stockpiles of distillates, such as home heating oil, increased by 1.2 million barrels, while gasoline supplies were up by 1.2 million barrels.
"The data looks bearish on most fronts with products supplies building more than expected as refinery activity held firm at the prior week's level," said Jim Ritterbusch, an energy analyst.
The U.S. government also said that oil product demand over the previous four weeks was 19.1 million barrels per day. That was down 6.7 per cent from demand in the same four-week period last year.
Energy demand has declined as the United States economy has slipped toward recession.
Oil jumped by $6.62 US on Tuesday amid signs that Saudi Arabia and some other OPEC members might cut oil production.
With files from Associated Press
