Crude Oil Prices Hit Hard

The benchmark U.S. plunges from a record high after bearish inventory data.
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Updated from 1:56 p.m. EDT

Crude oil prices closed sharply lower Wednesday after the release of closely watched weekly inventory data that showed gains in U.S. crude and gasoline stockpiles.

The December futures contract lost $2.71, or almost 5%, to $52.46 a barrel on the Nymex, after matching the record high on Tuesday.

U.S. production is still recovering from the widespread disruption of Hurricane Ivan as it swept through the energy-rich Gulf of Mexico in September.

In addition, periodic sabotage attacks on Iraqi oil facilities, which have slowed or halted exports from time to time, are now a fundamental market concern.

OPEC has reportedly asked the U.S. to release oil from its Strategic Petroleum Reserve to take the pressure off prices and increase short-term supplies with excess capacity thin.

The oil cartel has increased its official production ceiling three times since July for a total of 3.5 million barrels a day, a move that has had virtually no impact on the market.

Prices closed above $55 for the first time ever last Friday, the latest in a seemingly endless parade of record highs since May. The intraday high, also touched on Oct. 22, is $55.43.

With winter looming, heating oil prices have also been soaring, reflecting market concerns about supply during a period of unusually strong global demand. The data out today did show another decline in crude oil distillates, which include heating oil, but traders took their cue from gains in the other categories.