Oil Update: Oil Plummets After Inventory Spike

Updated with new stock movements and settlement price.

NEW YORK (TheStreet) -- Investors were sending oil futures plunging at a furious rate following official word today that oil inventories grew well more than expected.

Today, light, sweet crude for September delivery plummeted $3.88 to settle at $63.35 per barrel on the New York Mercantile Exchange. This comes after yesterday's slide, which saw the contract lose $1.15 to settle at $67.23.

Earlier in the morning, the Energy Information Administration reported that oil inventories had swelled by 5.1 million barrels in the week ended July 24th, bringing the ever-present specter of continued sluggish demand into view. Crude inventory levels stand at 347.8 million barrels, which is at the higher end of the average for this time of year. Analysts expected oil reserves to grow by only 1.1 million barrels in the week.

Gasoline inventories dropped by 2.3 million barrels, while distillate fuel inventories jumped 2.1 million barrels. Propane/propylene stocks also grew by 2 million barrels.

The drop in futures comes just as several major integrated oil and gas operations begin to post earnings reports. This morning, ConocoPhillips(COP Quote) said profit fell 76% in the second quarter, thanks to declining oil prices -- or at least declining prices compared to the halcyon days of last summer's astronomical prices. Hess(HES Quote) did ConocoPhillips one better -- or worse -- in reporting an 89% drop in its quarterly earnings.

Shares of ConocoPhillips and Hess lost 3.5% each today by closing.

Tomorrow, Exxon Mobil(XOM Quote) will drop its earnings report on investors' laps, followed by Chevron(CVX Quote) on Friday. Shares for each finished down 2.1% and 2.6%, respectively.