Wednesday, October 8, 2008

U.S. Crude Oil Inventories Increase While Demand Slackens

Crude oil and gasoline inventories increased last week in the U.S., as crude supplies grew by 8.1 million barrels to 302.6 million, according to the Energy Information Administration.

As expected, the lowering demand because of economic fears, along with the growing inventory has put downward pressure on prices as oil dropped below $87 a barrel early in the day for November delivery. Gasoline futures also fell by over 10 cents to their lowest levels in a year.

Most analysts were surprised by the amount the oil inventory rose, as they had looked for a 6 percent gain, while the real gain was 8.6 percent, now bringing inventories up to 80.9 percent of capacity as of last week.

Gasoline supplies increased 7.2 million barrels to end the week at 186.8 million. Some analysts were especially surprised here, as they were looking more for an increase of around 1.1 million barrels.

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