Oil Slides Toward Multiyear Lows

Moving with lightning speed, the Democratic-controlled Congress and White House agreed Wednesday on a compromise $789 billion economic stimulus bill designed to create millions of jobs. President Barack Obama could sign the measure within days.

Jim Ritterbusch, president of Ritterbusch and Associates, said it is unclear how much oil will benefit from the stimulus package and the Treasury Department's plan announced earlier this week to spend more than $1 trillion to help remove banks' soured assets from their books and unclog the credit markets.

"Just like the stock market, there's a feeling of the malaise because of a lack of definition," he said.

He said he is looking for oil prices to retest multiyear lows of $32.70 reached in January.

The Energy Information Administration said Wednesday that crude inventories for the week ended Friday jumped 4.7 million barrels to 350.8 million barrels, surpassing the expectations of analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., who expected a boost of 3.4 million barrels. Including last week's buildup, crude inventories have increased by more than 30 million barrels in the past five weeks.

Oil trader and analyst Stephen Schork said inventories are now 16.5% above year-ago levels and within 10.5% of the all-time high of 391.9 million barrel set in late summer of 1990 just before Iraq invaded Kuwait.

Gasoline inventories last week, however, slipped by 2.6 million barrels, or 1.2%, and demand for the four weeks ended Friday rose 0.1 to 8.8 million barrel a day, suggesting that more people may be spending money on fuel. Analysts expected stockpiles of the motor fuel to rise by 900,000 barrels.