Supply Reports Help Push Oil Prices Down

Crude oil prices fell sharply in heavy trading Wednesday, hitting their lowest levels in about two months amid reports of growing supplies and continuing speculation that OPEC might increase its production.

The December delivery price for West Texas Intermediate, the benchmark U.S. crude, fell as low as $18.85 per barrel on the New York Mercantile Exchange before recovering to close at $19.07, down 42 cents from Tuesday.

Wednesday’s drop followed declines totaling 37 cents on Monday and Tuesday and put prices at their lowest since the near-month contract traded in the $18.80 range in early September, analysts said.

Among refined products traded on the exchange, wholesale home heating oil for December delivery fell 0.98 cent a gallon to 55.23 cents, and wholesale unleaded gasoline for December fell 0.61 cent a gallon to 50.89 cents.

Analysts said the decline in crude stemmed mainly from speculation that supplies were building significantly.

An American Petroleum Institute report issued after the close of trading Tuesday showed what market watchers termed a significant 11.123 million-barrel rise in U.S. crude oil stocks over the past week.

A barrel equals 42 gallons.

The report added to bearish momentum arising from continued concern over friction over production and price issues within the Organization of Petroleum Countries. The 13-nation cartel is to meet next month in Vienna, Austria.