Crude oil futures endured a third day of consecutive losses on persistent concern about Europe's debt crisis and after official data showed weak US fuel demand.

Crude for November delivery settled down $1.39 at $89.98 a barrel on the New York Mercantile Exchange, closing below $90 for the first time since the start of August.

Even an unexpected fall in inventories didn't boost oil prices as traders continued selling off oil shares.

Weekly figures from the Energy Information Administration showed crude inventories fell by 2.4m barrels for the week ended September 21st. Most analysts had forecast an increase of 1.5m barrels.

The EIA also said gasoline inventories fell 500,000 barrels, while supplies of distillates, which is used in diesel and heating oil, declined 500,000 barrels.

Analysts had predicted a gasoline supplies to remain unchanged and distillates supplies to rise 1m barrels.

While the data should have boosted oil prices, focus turned to figures from the EIA which demand for fuel products in the last four weeks fell to the lowest level since the start of April.

Meanwhile fresh nerves about the Eurozone debt crisis also prompted traders to unwind positions as the yield on Spanish 10-year bonds surged a massive 32 basis points to 6.07%, a level that is considered unsustainable. Spain is also preparing to submit a new austerity budget on Thursday.

Brent crude on the ICE futures exchange fell 62 cents at $109.81 a barrel.

US gasoline futures surged 3.8% on Wednesday after an explosion at Irving Oil's Saint John Refinery in Canada.

Among precious metals gold skidded to a two week low mid week as traders opted for the safe haven qualities of the dollar and US bonds.

Gold for December delivery fell $12.80 to $1,753.60 an ounce on the Comex division of the New York Mercantile Exchange.

Palladium for December delivery dropped $15 to $625.85 an ounce while copper for December delivery eased 5 cents to $3.71 a pound.

Silver for December fell 1 cent to settle at $33.94 an ounce.



CJ

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