15 Jan 2009

Oil falls 4% in price as US fuel stocks rise

7:59 am on 15 January 2009

Oil prices fell by almost 4% to $US36 per barrel due to rising inventories and falling demand in the United States.

The US Energy Information Administration says inventories of distillate fuel - which include heating oil and diesel - rose by 6.4 million barrels in the week to 9 January. Stocks of gasoline and crude also rose.

US crude traded down $US1.47 to $US36.31 per barrel by 12:55pm

EST (1755 GMT) on Wednesday after falling as low as $US35.52. London Brent crude fell 55 cents to $US44.28 a barrel.

The US Commerce Department said total retail sales fell 2.7% last month.

Oil prices have crashed from a record of $US147,27 per barrel on 11 July 2008.

In an attempt to slem the tide, members of the Organization of the Petroleum Exporting Countries agreed to a series of output cuts late last year, including a record 2.2 million barrels per day in December on top of 2 million bpd since September.

Saudi Arabia said on Tuesday it's prepared to make even more cuts next month.