The price of oil fell by almost $2 a barrel Wednesday after OPEC warned of weakening energy demand and the U.S. government confirmed what most traders had already assumed: Domestic supplies of oil and gasoline are rising.
Crude futures have plunged by more than $4 since the start of the week, settling below $58 a barrel for the first time in nearly two months.
“So far, the downtrend is not showing any signs of stopping,” said Tom Bentz, an oil broker at BNP Paribas Commodity Futures in New York. Bentz said it was hard to tell how far oil prices might fall, though he threw out $55 as a possible area of support.
Oil-market concerns about Iran, the No. 2 producer in the Organization of the Petroleum Exporting Countries, have dissipated somewhat but have not disappeared, and analysts say the midwinter price drop could easily be followed by an early- spring rally.
Light sweet crude for March delivery declined by $1.92 to $57.65 a barrel on the New York Mercantile Exchange.
It was the lowest settlement price for the front-month futures contract since Dec. 19, when oil closed at $57.34, but crude futures are still more than 20 percent higher than a year ago.
Gasoline futures, which settled near a one-year low Tuesday, finished basically unchanged at $1.3848 a gallon. Heating-oil futures were also steady, settling at $1.6075 a gallon.
Natural-gas futures fell 4.8 cents to close at $7.066 per 1,000 cubic feet.
In its weekly petroleum-supply report, the U.S. Energy Department said crude-oil inventories grew last week by 4.9 million barrels to 325.6 million barrels, or 11 percent higher than a year ago.
Gasoline inventories increased by 2.2 million barrels to 225.5 million barrels, or 2 percent above year-ago levels. The supply of distillate fuel, which includes diesel and heating oil, rose by 900,000 barrels to 136.9 million barrels, or 14 percent higher than a year ago.
The agency’s report said gasoline demand over the past four weeks was 1.8 percent higher than a year ago, while jet-fuel demand over the same period was close to 1 percent higher.
OPEC forecast Wednesday that crude-oil demand will grow at a slower pace this year as uncertainties remain over economic growth in the U.S. and Asia.
