Oil prices continued to fall today following a sell-off triggered by rising gasoline supplies in the United States and concerns that high oil prices have weakened demand.
Light, sweet crude for June delivery fell 17 cents to $68.52 a barrel in electronic trading on the New York Mercantile Exchange. The contract settled yesterday at $68.69 a barrel, a fall of 84 cents.
US government data showed the domestic supply of gasoline rose for the third straight week amid stagnating demand.
The Department of Energy said in its weekly petroleum supply snapshot that domestic gasoline supplies grew by 1.3 million barrels last week to 206.4 million barrels. Although that is 3.5 per cent below year-ago levels, it comes at a time when gasoline consumption appears to be flattening out as a result of high prices.
The department said US gasoline demand over the past four weeks was 9.2 million barrels per day, or about even with the same period last year.
Other data showed crude oil inventories slipping by 100,000 barrels last week to 346.9 million barrels, or 4.7 per cent higher than last year, and distillate fuel stocks also falling by 100,000 barrels to 114.6 million barrels, or 7 per cent higher than last year.
Lending to the weakness in oil prices was a monthly report from the Organisation of Petroleum Exporting Countries, which slightly reduced its demand forecast for 2006 and predicted that the world's crude-oil supply cushion would rise significantly by the end of the year.