Juan Vera fills his automobile gas tank with $2.09 regular unleaded gasoline at a service station in Taft, Texas, Monday. Pump prices have fallen 29 percent from their July record high.AP photo
NEW YORK — Oil prices tumbled below $67 a barrel to 16-month lows Wednesday after the government reported big increases in U.S. fuel supplies — more evidence that the economic downturn is drying up energy demand.
The Energy Information Administration said crude inventories jumped by 3.2 million barrels last week, above the 2.9 million barrel increase expected by analysts surveyed by energy research firm Platts. Gasoline inventories rose by 2.7 million barrels last week, and inventories of distillates, which include heating oil and diesel, rose by 2.2 million barrels.
Over the last four weeks, the EIA said, motor gasoline demand was down 4.3 percent from the same period last year. Distillate fuel demand was down 5.8 percent, and jet fuel demand was down 9.2 percent.
“The main theme here that’s driving this market into new low ground is demand deterioration,” said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates. “As we begin to see evidence that demand is leveling — it doesn’t have to increase, just level — then we can start discussing a possible price bottom. But it appears premature at this point.”
Light, sweet crude for December delivery fell $5.43 to settle at $66.75 on the New York Mercantile Exchange, after falling as low as $66.20. It was the lowest close for a front-month contract since June 13, 2007, when crude settled at $66.26.