LONDON, Nov 5: Oil prices tumbled almost $5 on Wednesday as the latest data pointed towards weakening demand in the United States, the world’s biggest energy consuming nation.

On the New York Mercantile Exchange (NYMEX), light sweet crude for December delivery lost $4.85 to $65.68 per barrel.

Brent North Sea crude for December dropped $4.50 to $61.94 on London’s InterContinental Exchange (ICE).

Losses picked up after the United States Department of Energy said US motor fuel stockpiles jumped 1.1 million barrels in the week to October 31, confounding market expectations for a modest fall.

The DoE added that crude reserves were flat last week.

“Demand is starting to wane quite considerably,” Sucden analyst Robert Montesfusco told AFP. “We are not seeing any good demand,” he added.

The data is a key gauge of oil consumption in the United States.

The price of oil has more than halved from record highs above $147 in July when fears of supply disruptions sent them rocketing as fears of a major global economic slowdown have taken hold.

“Worries over the international economic outlook have not disappeared,” warned David Moore, a commodity strategist with the Commonwealth Bank of Australia.

Investors were also reacting

to the election of Democrat Barack Obama as United States President.

Experts said on Wednesday that Obama’s policy calling for reducing US dependence on foreign oil would not pose a significant threat to Gulf producers who pump nearly a fifth of global needs.

Obama, the first African-American to win the presidency, had vowed during his campaigning that within 20 years, 85 per cent of cars on US roads would no longer be powered by oil or gas-based fuels.

He also eased his initial opposition to proposed legislation to allow offshore drilling in a bid to raise US domestic oil production, thus helping reduce dependence on imports and bring down prices.

“There will be no problem for the Gulf countries in the foreseeable future even if Obama succeeds in implementing his policy,” said the head of the Saudi Al-Dakkak Economic Studies House, Ali al-Dakkak.

“Whatever the United States does, it will continue to need foreign oil for a very long time,” Jeddah-based Dakkak told AFP.

Oil prices had soared $6 on Tuesday to above $70 in New York as the US currency weakened against the euro and on evidence that Organisation of Petroleum Exporting Countries members were cutting production as promised, analysts said.—AFP