Most industry watchers had their suspicions confirmed concerning an expanding crude oil inventory in the U.S., as the government report revealed a declining demand as consumers cut back on spending, causing the investory to rise.
As of about 11 a.m. EST, November delivery for light, sweet crude dropped by $4.73 to $68.87 a barrel on the New York Mercantile Exchange.
The last time oil prices were this low was on August 22, 2007, when the session finished at $69.26 a barrel. Prices have plunged since the high of $147 a barrel in July.
What triggered an even bigger fall than looked for was the amount of the inventory growth. Most analysts expected inventories to rise, but were looking for about 3.1 million barrels, instead inventory grew by a more-than-expected 5.6 million barrels for the week ending October 10.
Gasoline inventory tracked oil inventory, rising by 7 million barrels. According to the Energy Information Administration, gasonline demand has fallen by 5.2 percent over the last four weeks, averaging 8.8 million barrels a day, said the agency.
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