(By Mayur Pahilajani - iStockAnalyst Writer)
New York, NY - Oil futures declined below $70-a-barrel mark on Thursday which is the lowest level in 14 months on reports that higher inflation rate and rising unemployment rate will prompt the drivers across the globe to cut down on fuel usage.
The fear of decreasing global demand resulted in a rise in crude supplies by 5.6 million barrels to 308.2 million barrels for the week ending Oct. 10, according to the Energy Department Thursday. The market analysts on Wall Street had speculated the supplies to rise by 2.6 million barrels.
Last week was the third consecutive one to register an increase in stockpiles. According to the report, fuel demand in the U.S. was around 18.6 million barrels a day on average basis in the last month. While, natural-gas inventories increased by 79 billion cubic feet last week compared to the expectation of it to rise by 85 billion cubic feet.
The report showed that gasoline inventories climbed 6.97 million barrels to 193.8 million barrels last week. The market analysts had expected gasoline stockpiles to increase by 3 million barrels for the week ending Oct. 10.
Light, sweet crude for November delivery declined to the low of $69.15 a barrel, and was recently trading at $4.58 at $69.96 a barrel in electronic trading on Globex. On Wednesday, the contract had closed down by $3.33, or 4.5 percent, to $71.23 a barrel during after-hours trading on the New York Mercantile Exchange.
Crude oil prices have retreated over the past few weeks to the lowest since Aug. 22, 2007 on Thursday, and it has been down over 50 percent from its record level in the month of July. On April 3, the contract had settled at $103.83 a barrel in New York, while oil had hit a record high price of $147.27 a barrel on July 11.
Brent North Sea crude for October delivery also declined by $4.55, or 6.4 percent, to $66.25 a barrel in London's ICE futures exchange.
Among energy producers, shares of the Amex Oil Index (NYSE: XOI) traded up by 0.96 percent or $7.73 to $811.57 at 12:23pm ET on Thursday, after falling trading low of $754.97 that is close to its 52-week low at $744.56. While the Amex Natural Gas Index (NYSE: XNG) was trading up by 4.59 percent or $15.76 at $359.10.
While, the Philadelphia Oil Service Index (NYSE: $OSX) was declining by $4.78 or 3.37 percent to $137.86 at 12:29pm ET.
Chevron Corp. (NYSE: CVX) was moving down by 3.68 percent or $3.68 to $57.77 at 12:11pm ET, after closing at $59.98. Exxon Mobil Corp. (XOM) was rising up by 1.69 percent or $0.77 or 1.23 percent to $763.12 at 12:13pm ET. on Thursday, after it fell to $59.17 that is close to its 52-week low of $56.51.
Shares of SemGroup Energy Partners (NASDAQ: SGLP), previously owned by a privately held SemGroup L.P., was increasing by 0.54 percent or $0.02 to 3.69, up from its last closing at 3.67. The stock hit a high at $4.39 so far in to the day.
