Oil prices dropped to about $68 a barrel today in Asia, even as an unexpected jump in US crude inventories suggested that consumer demand remains in the doldrums.
Benchmark crude for November delivery was down 71 cents at $68.26 a barrel by midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract tumbled $2.79 to settle at $68.97 on Wednesday.
The $70 a barrel level has been a magnet for months, with growing optimism that the global economy is recovering from recession offset by signs that crude demand isn't picking up.
Crude supplies grew by 2.8 million barrels and gasoline by 5.4 million barrels last week, according to the Energy Information Administration on Wednesday. Analysts had expected crude levels to decline by nearly that much, according to a survey by Platts, the energy information arm of McGraw-Hills Cos.
A weaker US dollar has helped bolster oil prices in recent weeks. Crude is priced in dollars so it becomes cheaper when the dollar falls. The dollar is at a nearly one-year low against the euro, and fell yesterday after the Federal Reserve said it would keep interest rates at a record low near zero.
The euro was steady today in Asian trading at $1.4722 while the dollar fell to 91 yen.
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