NEW YORK (Reuters) - Oil dipped on Wednesday as concerns over the U.S. economy and sliding fuel demand outweighed hurricane-related supply disruptions that have pushed U.S. gasoline stockpiles to their lowest level since 1967.
U.S. crude fell 88 cents to settle at $105.73 per barrel, and London Brent crude fell 63 cents to $102.45 a barrel.
The losses came after a U.S. government report showed nationwide oil demand over the past four weeks running 5.3 percent below last year in the midst of mounting economic turmoil in the world’s largest fuel consumer.
Doubts over a sweeping $700 billion plan to rescue the U.S. economy from a deepening housing crisis pushed down global markets, including commodities.
“Crude prices are down as people are taking profits, waiting for what will happen next in the bid to enact a $700 billion bailout package for distressed banks,” said Mark Waggoner, president of Excel Futures in Huntington Beach, California.
The losses came despite data from the U.S. Energy Information Administration showing declines in nationwide crude oil and refined products supplies in the wake of Hurricane Ike, which hobbled U.S. energy operations.
U.S. refinery utilization fell to the lowest level on record in the week through September 19, according to U.S. government data, reflecting shut-ins along the Gulf of Mexico caused by Hurricane Ike this month.
Crude stocks tumbled by 1.5 million barrels, less than analyst expectations for a 2 million-barrel fall, while gasoline stocks fell by 5.9 million barrels, compared with analyst forecasts for a 4 million-barrel draw.
Distillate stocks were down 4.2 million barrels against calls for a 1.5 million-barrel drop.
“The impact of Hurricane Ike was in full force in this week’s EIA data as supplies across the board dropped rather sharply, a trend that should continue over the coming weeks sending gasoline stocks to dangerously low levels,” said Chris Jarvis, senior analyst for Caprock Risk Management.
U.S. gasoline inventories have dropped to their lowest level since 1967, the EIA said Wednesday.
Energy firms continued efforts to restart production at refineries and pipelines after Ike battered U.S. oil infrastructure in the biggest hit to the U.S. energy supplies since the 2005 hurricane season.
Prices drew some support from a report by Petrologistics that OPEC oil supply fell by 800,000 barrels per day (bpd) in September due to lower output from members including Saudi Arabia and Iran.
The estimate suggested OPEC was starting to cut back supplies to levels seen in July even before it agreed on September 10 to trim output to official targets to prop up prices.
“I think the Petrologistic numbers had an impact,” said Olivier Jakob, analyst for Petromatrix.
Oil prices have dropped from a record peak above $147 a barrel in July as high fuel prices and mounting economic problems began to curb demand in the United States and other top consumers.
Reporting by Richard Valdmanis; Additional reporting by Matthew Robinson and Jane Merriman in London and Fayen Wong in Perth; editing by Matthew Lewis
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