LONDON, Oct 4: World oil prices fell briefly below $58 per barrel on Wednesday following news of a bumper increase in crude stockpiles in the United States, dealers said.

New York's main contract, light sweet crude for delivery in November, plunged to $57.75 per barrel in pit trading, a level last seen on February 16.

The contract later recovered to trade at $58.85, an increase of 17 cents from Tuesday's close.

Brent North Sea crude for November delivery sank to $57.70 per barrel in electronic deals -- an intra-day low last seen on December 30, 2005.

Brent crude later stood at $58.30 per barrel, marking a drop of 13 cents from Tuesday's finish.

The US Department of Energy said on Wednesday that crude oil reserves surged 3.3 million barrels to 328.1 million barrels in the week to September 29.

Financial markets had expected crude reserves to fall by 1.1 million barrels.

“The market was surprised by the crude build,” said Societe Generale analyst Deborah White.

Crude stocks are now around 6.7 per cent higher than at the same stage last year.

Inventories of distillates, used for heating oil and diesel fuel, crept up by 200,000 barrels to 151.5 million last week. That was far less than forecasts of a gain of 1.5 million.

Distillates are a key market focus ahead of the northern hemisphere winter, during which demand for heating fuel traditionally hits a peak.

Stockpiles of gasoline, or petrol, showed an increase of 1.2 million barrels to 215.1 million, compared with expectations of a bigger rise of 1.5 million.

“The market has been over-supplied with crude for a long time and for the last month, it has been increasingly oversupplied with gasoline and distillate,” White added. So far this week, crude futures have shed around $5 or 8 per cent in value.

Prices are plumbing fresh multi-month lows as the market is calmed by bulging US fuel inventories, signs of slowing US economic growth, a mild Atlantic hurricane season and forecasts for a warmer-than-usual winter.

—AFP