Oil falls below $66 on ample supply, rising stocks

Wed Dec 10, 2014 4:20am EST
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By Christopher Johnson

LONDON (Reuters) - Brent crude oil slipped below $66 a barrel on Wednesday, just above a five-year low, on mounting signs of oversupply and lackluster demand as global economic growth falters.

The price of the North Sea oil benchmark has fallen more than 40 percent since June as new supplies of high-quality crude from North America have fed a glut of fuel in many parts of the world.

Data from the American Petroleum Institute (API) on Tuesday showed U.S. crude oil inventories rose by 4.4 million barrels last week to 377.4 million barrels, compared with analysts' expectations of a drop of 2.2 million.

U.S. gasoline and distillate stocks also showed big builds, the API said.

Brent futures for January LCOc1 fell to a low of $65.68 a barrel, down $1.16, before recovering slightly to trade around $65.90 by 0850 GMT (03:50 a.m. EST). The contract reached $65.29 on Tuesday, its lowest since September 2009.

U.S. crude futures CLc1 were down $1 at $62.82 a barrel.

"Almost all the news flow points to a weaker market," said Carsten Fritsch, oil analyst at Commerzbank in Frankfurt.

"We have had very bearish API data with large stock builds across the board, and also a very bearish Short-Term Energy Outlook from the EIA, with a sharp reduction in demand growth forecasts for next year."   Continued...

A man changes the price for a gallon of gasoline at a gas station in Medford, Massachusetts December 4, 2014. REUTERS/Brian Snyder