August 23, 2007	Thursday	Sha’aban 9, 1428

LONDON, Aug 22: World oil prices fell on Wednesday as traders reacted to a shock increase in crude reserves in the United States, which is the world’s biggest energy consumer.

Prices also pushed lower as Hurricane Dean spared major US energy production facilities in the Gulf of Mexico.

New York’s main futures contract, light sweet crude for delivery in October, sank 66 cents to $68.91 per barrel after falling as low as $68.63 -- which was last seen on June 27.

The price of Brent North Sea crude for October delivery shed nine cents to $68.60 per barrel. The US Department of Energy said on Wednesday that American crude inventories rose by 1.9 million barrels in the week ending August 17.

That beat analysts’ consensus forecasts for a drop of 2.75m barrels and snapped a six-week run of falls. Fimat analyst Antoine Halff said the report showed US crude demand was dropping -- prompting some investment funds to exit the oil market.

“Funds need liquidity to meet losses elsewhere,” Halff said.

“It’s not completely surprising given the numbers -- the rise in crude and the fall in refinery runs show crude is not as much in demand.”

The DoE added that US gasoline or petrol reserves sank by 5.7 million barrels -- which was heavier than market expectations for a drop of 800,000 barrels.

Veronica Smart, analyst at the Energy Information Centre, said the market was more interested in crude oil than gasoline statistics.

“Keep in mind the driving season is nearly over and the market’s focus is shifting away from gasoline and to crude,” she added. Earlier on Wednesday, oil prices had staged a modest rebound following sharp falls earlier this week as Hurricane Dean appeared on course to miss vital oil rigs in the US Gulf of Mexico.—AFP