Crude Oil Drops to January 2007 Levels

Analysts had expected a boost of 1.2 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

The one strong point in energy markets were distillates such as heating oil.

With winter cold reaching into the Northeast, inventories of distillate fuel fell by 1.5 million barrels to 126.9 million barrels for the week ended Nov. 14. Analysts expected distillate stocks to rise by 900,000 barrels.

Yet gasoline inventories rose by 500,000 barrels, or 0.3%, to 198.6 million barrels, which is 1.3% below year-ago levels. Analysts expected stockpiles of the motor fuel to rise by 700,000 barrels.

Demand for gasoline over the four weeks ended Nov. 14 was 2.2% lower than a year earlier, averaging 9 million barrels a day, the EIA said in its weekly report.

Compared with summer highs, that has lead to huge breaks at the pump, with average gasoline prices below $2 in a handful of states, from Texas to Minnesota.

Stock markets have served for the past few months as a barometer in crude traders about the health of the global economy.

Wall Street turned sharply lower Wednesday, as a bailout of Detroit's Big Three automakers appeared stalled on Capitol Hill, and another round of downbeat economic news further disheartened investors. The Dow Jones industrials fell more than 400 points.

Markets overseas fell as well. Japan's benchmark Nikkei index fell 0.7%, Hong Kong's Hang Seng index dropped 0.5% and the Korea Composite Stock Price Index slid 1.9%. European markets also fell across the board.