Oil prices fell to below $ 69 a barrel on Wednesday Asia, extending losses to an eight-month low as mixed US crude supply figures failed to stem a two week sell-off.
Benchmark crude for June delivery was down 81 cents to $ 68.60 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 54 cents to settle at $ 69.41 on Tuesday.
Oil has plunged more than 20 per cent from $ 87.15 a barrel on May 3 on investor concern that efforts to contain Europe’s debt crisis could fail and deep government spending cuts will hurt economic growth and oil demand.
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Oil inventory data from the American Petroleum Institute late yesterday was mixed. Crude and distillate supplies fell while gasoline stocks rose. Supplies at the key storage terminal in Cushing Oklahoma rose to a fresh record high.
The Energy Department’s Energy Information Administration announced its weekly inventory data report.
“The recent selling pressure that has gripped the oil market continues to hinge on factors external to oil-specific fundamental developments,” Barclays Capital said in a report.
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“Market perceptions over possible developments of the sovereign debt crisis are set to remain an important pricing factor“.
Traders are closely watching the euro since oil becomes more expensive for investors holding the European currency as the U.S. dollar strengthens.
The euro was steady at $ 1.2183 today after dropping to a fresh four—year low of $ 1.2146 earlier in the session.
“As long as the euro continues to sink like a rock in water, the price of oil will remain on the defensive,” Mike Sander of Sander Capital Advisors said.
In other Nymex trading in June contracts, heating oil fell 1.22 cents to $ 1.9493 a gallon, and gasoline dropped 1.2 cents to USD 2.0314 a gallon. Natural gas was down 4.2 cents at $ 4.300 per 1,000 cubic feet.
In London, Brent crude July contact was down 52 cents to $ 73.91 on the ICE futures exchange.