MT: Oil stays below US$69 as US crude supplies jump
VIENNA - Oil prices dropped further below $69 a barrel Thursday, after an unexpected jump in U.S. crude inventories suggested consumer demand remains in the doldrums.
Benchmark crude for November delivery was down 32 cents at $68.65 a barrel by noon European electronic trading on the New York Mercantile Exchange. The contract tumbled $2.79 to settle at $68.97 on Wednesday.
The $70 a barrel level has been a magnet for months, with growing optimism that the global economy is recovering from recession offset by signs that crude demand isn't picking up.
Crude supplies grew by 2.8 million barrels and gasoline by 5.4 million barrels last week, according to the Energy Information Administration on Wednesday. Analysts had expected crude levels to decline by nearly that much, according to a survey by Platts, the energy information arm of McGraw-Hills Cos.
"Yesterday's EIA inventory data offered a gut punch to bulls," commented Vienna's JBC Energy. on the steep decline.
A weaker U.S. dollar has helped bolster oil prices in recent weeks. The dollar is at a nearly one-year low against the euro, and fell Wednesday after the Federal Reserve said it would keep interest rates at a record low - near zero.
The euro rose Thursday in Asian trading to $1.4749 while the dollar fell to 90.65 yen.
In other Nymex trading, gasoline and heating oil for October delivery were both down marginally at $1.70 and $1.75 a gallon. Natural gas slipped by less than a penny to $3.85 per 1,000 cubic feet.
In London, Brent crude fell 38 cents to $67.61 on the ICE Futures exchange.
