Crude Oil Drops Below $70

Crude oil fell below $70 a barrel to the lowest since June 2007 and gasoline tumbled after a U.S. government report showed stockpiles increased more than twice as much as forecast.

Supplies rose 5.6 million barrels to 308.2 million barrels last week, the Department of Energy said in a weekly report. Oil also fell on doubts that the bank rescue plan will bolster global economic growth and fuel use. OPEC brought forward its planned meeting from next month to Oct. 24 after the oil price drop.

Crude oil for November delivery fell $4.69, or 6.3 percent, to $69.85 a barrel at 2:51 p.m. on the New York Mercantile Exchange, the lowest settlement since Aug. 23, 2007. Oil touched $68.57 a barrel, the lowest intraday price since June 27, 2007.

Gasoline for November delivery declined 16.02 cents, or 8.9 percent, to settle at $1.622 a gallon in New York, the lowest since Feb. 15, 2007.

Crude oil inventories were forecast to rise 2.6 million barrels, according to the median of analyst estimates in a Bloomberg News survey.

Gasoline stockpiles climbed 6.97 million barrels to 193.8 million barrels in the week ended Oct. 10, the report showed. Supplies were forecast to rise 3 million barrels, according to the Bloomberg survey.

U.S. fuel demand averaged about 18.6 million barrels a day during the past four weeks, the lowest since June 1999, according to the report. The U.S. consumes 24 percent of the world's oil.

The Organization of Petroleum Exporting Countries, the producer of 40 percent of the world's oil, reduced its forecast for average oil demand next year by 450,000 barrels a day, or 0.5 percent, to 87.21 million barrels a day, in a report yesterday.

U.S. industrial output fell in September by the most in almost 34 years. The 2.8 percent decrease in output at factories, mines and utilities exceeded forecasts and followed a revised 1 percent decrease in August, the Federal Reserve said today.

Brent crude oil for November settlement declined $4.48, or 6.3 percent, to settle at $66.32 a barrel on London's ICE Futures Europe exchange, the lowest closing price since May 10, 2007., Bloomberg
10/16/2008 1:13:52 PM