* Oil falls below $70 for the first time since Aug 2007
* US data shows large increases in crude, gasoline stocks
(Recasts, updates prices)
By Joe Brock
LONDON, Oct 16 (Reuters) - Oil fell below $70 a barrel for
the first time since August last year after the U.S. government
data showed larger than expected increases in crude and gasoline
inventories and weaker product demand.
Crude oil inventories in the United States rose 5.6 million
barrels last week, the government data showed, compared with
analysts' expectation of a 1.9 million barrel increase.
Gasoline inventories rose 7.0 million barrels against
analysts' forecast of a 2.9 million barrel increase.
"It is decidedly bearish. It pushed crude below $70 a
barrel, and the 7 million gasoline build was just a whopper,"
said Jim Ritterbusch, president of Ritterbusch & Associates.
U.S. crude <CLc1> fell more than $5 at one point, sliding to
as low as $69.15, the cheapest price since August last year. It
was trading $4.75 lower at $69.92 by 1532 GMT.
London Brent crude <LCOc1> also fell more than $5 to $65.70,
the lowest since May.
U.S. crude has fallen from its record highs above $147 hit
in July and it has lost nearly a third in value in three weeks,
the steepest such decline since it began trading in 1983.
Total oil product demand in the past four weeks fell 8.9
percent from a year earlier. []
A separate data from the Federal Reserve showed U.S.
industrial production posted the biggest monthly decline since
1974. []
"Economic weakness is hitting the stock and oil markets, but
the oil price fall is also reflecting a lack of demand. It is
very difficult to buy oil if you are having a hard time getting
credit lined up," said Francisco Blanch, head of commodity
research at Merrill Lynch.
Analysts have scaled back global oil demand growth estimates
after a slew of gloomy economic data that suggest the credit
crisis has begun to undermine economic growth in the United
States, the world's top energy consumer.
OPEC
The Organization of the Petroleum Exporting Countries (OPEC)
said on Thursday it had brought forward an emergency meeting to
discuss the impact of global recession on oil markets to Friday
next week.
Pressure has been mounting within the 13-member group to
reduce supplies. There are expectations it may take action to
support prices.
Nigerian Oil Minister Odein Ajumogobia said the emergency
OPEC meeting was an opportunity to consider options regarding
the world oil price but that no course of action had yet been
proposed.
"I regard it as an exploratory meeting to review facts and
options. Not even tentative proposals have been discussed at
this stage," Ajumogobia told Reuters.
Hurricane Omar, which disrupted shipments from Venezuela
this week, strengthened into a major Category 3 storm on
Thursday as it headed toward Puerto Rico and the northeastern
Caribbean, but was on a northeast trajectory away from the U.S.
Gulf, the National Hurricane Center said. []
(Additional reporting by Jane Merriman and Ikuko Kao in London;
editing by James Jukwey)
