* Oil hits low below $70, first time since Aug 2007
* US data shows large increases in crude, gasoline stocks
* Total U.S. product demand sinks 8.9 pct
(Recasts, updates prices, market activity; new dateline,
previously LONDON)
NEW YORK, Oct 16 (Reuters) - Oil fell below $70 a barrel on
Thursday for the first time since August last year after U.S.
government data showed crude and gasoline inventories surged
much more than expected, while product demand slid.
Crude oil inventories in the United States rose 5.6 million
barrels last week, the government data showed, far exceeding
analysts' expectation of a 1.9 million barrel increase.
Gasoline inventories rose 7.0 million barrels, more than
double analysts' forecast of a 2.9 million barrel increase.
Meanwhile, demand for oil products over the past four weeks
dropped 8.9 percent from year ago levels.[]
"It's still a demand story, we're moving lower following
the report. We saw some very large builds in gasoline and crude
oil for the second week in a row, this confirms the fact that
demand is truly weakening in the United States," said Amanda
Kurzendoerfer, commodities analyst at Summit Energy in
Louisville, Kentucky.
U.S. crude <CLc1> traded $4.10 lower at $70.44 by 1:17 p.m.
EDT (1717 GMT), after sliding to as low as $69.15, the cheapest
price since August last year.
London Brent crude <LCOc1> traded at $66.45, down $4.35.
U.S. crude has fallen from record highs above $147 hit in
July, and has dropped nearly a third in value in three weeks,
the steepest such decline since it began trading in 1983.
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 to Friday next
week an emergency meeting to discuss the impact of global
recession on oil markets.
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. []
(Reporting by Rebekah Kebede in New York; Joe Brock, Jane
Merriman, and Ikuko Kao in London; Editing by David Gregorio)
