Crude oil futures skidded to a six-week low on Wednesday after a weekly report showed a sharp rise in US supplies.

Crude for October delivery declined $3.31 or 3.5 per cent to settle at $91.98 a barrel on New York Mercantile Exchange. Oil prices are now at their lowest level since August 3rd 2012.

Crude futures have tumbled over 7% in the past few days in what many believe is due to long liquidation after prices moved above $100 a barrel on Friday for the first time since the start of May. Speculation about a Strategic Petroleum Reserve release is also thought to have weighed on oil prices since Monday.

While investors and the US Commodity Futures Trading Commission analyse the recent sharp sell-off, Wednesday's slide came, at least partly, on worries about rising inventories levels.

The Energy Information Administration said US crude oil stockpiles rose by 8.5m barrels last week, significantly more than the 500,000 barrels analysts had predicted. Some of that increase was due to imports, which were up by 1.3m barrels a day in the week ended September 14th to nearly 10m barrels a day.

However there is growing concern about slowing US oil demand with average demand falling to an average 18.3m barrels a day in the last month, the EIA said.

On the ICE Futures exchange Brent crude for November delivery dropped $3.84 to $108.19 a barrel.

Meanwhile gold prices rose to a high of $1,781.80 an ounce before later cooling off after the Bank of Japan's unexpected announcement of its asset-buying programme.

Gold for December delivery advanced 50 cents to settle at $1,771.70 an ounce.

Platinum was little changed after the previous day's weakness after the strike at Lonmin came to an end following a wage agreement with workers.

October platinum climbed $4.10 to $1,640.40 an ounce after losing a hefty $36.30 on Tuesday.



CJ

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