LONDON, July 16: Oil prices plunged by $5 five on Wednesday, extending this week’s spectacular losses after a surprise jump in crude reserves in key energy consumer the United States, traders said.

Prices had already tumbled on Tuesday as US economic growth concerns sent New York crude tumbling by the largest drop for 17 years.

On Wednesday, New York’s main oil contract, light sweet crude for August delivery, shed another $5.06 to $133.86 a barrel. It had dived on Tuesday by $6.44 in the sharpest daily decline since January 1991.

London’s Brent North Sea oil for August plummeted $4.35 to $134.40 on Wednesday.

Prices tumbled after the US Energy Information Administration said US crude stocks rose by 3.0 million barrels to 296.9 million barrels in the week ending July 11 surprising a market that had expected a drop of about 2.2 million barrels.

Oil hit record highs last Friday when the New York contract hit $147.27 and Brent $147.50.

The market had paused earlier on Wednesday as traders caught their breath following severe losses on Tuesday that were sparked by a gloomy economic outlook from US Federal Reserve chief Ben Bernanke, dealers said.

The Organisation of the Petroleum Exporting Countries (Opec) on Tuesday cut its forecast for growth of world oil demand this year to 1.20 per cent from 1.28 per cent, citing an economic slowdown and high fuel prices.

OPEC kingpin Saudi Arabia meanwhile on Wednesday denounced speculative trade in oil and called for more dialogue between producing and consuming nations.

“Oil has become ... practically like a currency (that) has attracted speculative interest among some companies and people,” said Saudi Arabian King Abdullah in an interview with the Italian daily La Repubblica.

“We don’t want the price to be so high. It is not in our interest because it is not in the interest of the rest of the world.”—AFP