Oil Down To $35 per Barrel

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http://www.news.com.au/business/stor...-31037,00.html

OIL prices fell for the second day running overnight after government data showed surging crude stockpiles amid sagging demand in the US, the biggest energy-consuming nation.
New York's main oil futures contract, light sweet crude for March, shed $US1.61 from its closing price on Tuesday to $US35.94 per barrel.

Brent North Sea crude for delivery in March fell 33 cents to $US44.28 a barrel in London.

The US Department of Energy (DoE) said in a report American crude stockpiles soared by 4.7 million barrels in the week ending February 6. That was higher than market expectations of a 3 million gain.

The report sparked choppy trading, with prices dropping and then recovering before falling again.

"With the refinery running rate coming down, its hard to make a case for the prices stabilising or rebounding any time soon because the demand is just not there in the United States," said John Kilduff of MF Global.

US reserves of gasoline declined by 2.6 million barrels, confounding expectations for a gain of 400,000 barrels.

Distillates inventories, which include heating fuel and diesel, sank by one million barrels. Analysts had penciled in a drop of 1.5 million barrels.

On Tuesday, prices also had been depressed amid lack of market confidence over a US plan to stabilise its rocky financial system.

Market players said the plan lacked details and may not be effective enough to contain the financial crisis.

Oil prices remain at weak levels after posting record highs above $US147 last July following fears of supply disruptions.

The International Energy Agency (IEA) overnight again cut its forecast for global oil demand this year, but warned about a future supply crunch because of current low investment levels.

The energy watchdog for industrialised nations forecast that global oil demand would measure 84.7 million barrels per day (bpd) on average in 2009 -- 570,000 bpd less than its last forecast made in January.

I feel so much better now that we are paying $1.28L :ticking: