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Oil Closes Below $91 on Inventory Report

Posted on: Wednesday, 28 November 2007, 18:00 CST

Oil fell nearly $4 to close below $91 a barrel Wednesday after a U.S. government inventory report said supplies at a key price-settlement point rose sharply.

Light, sweet crude for January delivery was down $3.80, or 4.02 percent, to close at $90.62 a barrel on the New York Mercantile Exchange, the lowest closing level since Nov. 14.

The close was $8.67, or 8.7 percent, lower than last week's record $99.29.

Inventories at the Nymex delivery terminal in Cushing, Okla., increased 600,000 barrels last week, the U.S. Energy Department said in its weekly inventory report.

Cushing is a key price-settlement point for West Texas Intermediate, a type of crude oil used as a benchmark in Nymex oil pricing.

Cushing inventories, up 1.2 million barrels two weeks ago, have risen 13.4 percent in two weeks.

Overall crude supplies fell 400,000 barrels last week, close to the 500,000-barrel decrease analysts expected.

Gasoline demand weakened, rising 134,000 barrels, the department said. Demand has risen 0.4 percent in the past four weeks compared with the same period last year.

Overall petroleum demand fell 487,000 barrels.

Natural gas lost 35.4 cents at $7.203 per 1,000 cubic feet. The December contract expired at the end of trading Wednesday and the Energy Department will report U.S. natural gas inventories Thursday.

Heating oil shed 7.96 cents, or 3 percent, at $2.5738 a gallon.

Reformulated-gasoline blendstock for oxygen blending fell 9.73 cents, or 4.1 percent, at $2.2757 a gallon.

AAA said the average U.S. retail regular unleaded gasoline price was $3.096 a gallon, up 0.5 cents from Tuesday's $3.091 a gallon.

Source: United Press International

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