After a government report showed a bigger-than-expected rise in crude inventories, oil prices fell to a nearly 22-month low on Nov. 19. U.S. crude for December delivery fell 77 cents to $53.62 a barrel. That reinforced concerns that demand for petroleum products is waning, according to CNN.
The last time prices were this low was January 2007. Concern about demand for petroleum products has driven crude oil prices down from a record high of $147.27 a barrel in mid-July. The decline has also slashed the price of unleaded gasoline in half since July to $2.047 a gallon, motorist group AAA reported Nov. 19.
The Energy Department said crude supplies rose by 1.6 million barrels in the week ended Nov. 14. Analysts had expected to see a rise of 1.2 million barrels of crude oil, according to energy research firm Platts.
An increase in crude stocks was largely expected, but the lack of any surprises backs up the idea among investors that demand for oil is on the decline, according to Stephen Schork, publisher of energy trading newsletter The Schork Report.
The government also reported that supplies of gasoline had risen by 500,000 barrels. Analysts had expected to see a 700,000 barrel rise in gas supplies.
Crude prices have been on the decline as investors worry about recession in developed nations such as the United States, the world's largest oil consumer, and in the developing world, where fuel demand had been rising the fastest.