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Oil Prices Give Up $49 Level

Weekly inventory data from the Energy Department shows a rise in oil but declines in other areas.
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Updated from 1:54 a.m. EST

Crude oil prices fell Wednesday after the release of closely watched weekly inventory data.

The March futures contract closed down 86 cents to $48.78 a barrel, after closing above $49 Tuesday for the first time since Nov. 29.

Energy Department data showed an increase in crude oil but a decline in gasoline and distillate products.

Traders continue to speculate on the possibility that OPEC members would agree to a second round of production cuts at its Jan. 30 meeting, having trimmed output by 1 million barrels a day as of Jan. 1.

The upcoming elections in Iraq at the end of the month also are raising concerns about new sabotage attacks on the oil industry infrastructure there, a factor that helped boost prices during much of 2004.

Prices are now about 10% below their record high of some $55 a barrel touched in late October, having fallen close to $40 a barrel at the peak of the correction.