Associated Press Oil prices tumble below $36 on bulging inventories

Oil prices plunge below $36 per barrel on report of building US stockpiles of crude
Dirk Lammers, AP Energy Writer,Wednesday February 11, 2009, 3:43 pm EST

SIOUX FALLS, South Dakota (AP) -- Oil prices plummeted below $36 Wednesday on more evidence that U.S. storage facilities are bulging with unused crude.

Light, sweet crude for March delivery fell $1.99 to settle at $35.94 a barrel on the New York Mercantile Exchange. Oil closed under $40 Monday for the first time in several weeks, and has closed lower every day since.

A weekly report from the Energy Information Administration showed that crude inventories jumped by 4.7 million barrels for the week ended Feb. 6. That easily surpassed the expectations of analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., who expected a boost of 3.4 million barrels. Including last week's build up, crude inventories have increased by more than 30 million barrels in the past five weeks.

But gasoline futures soared on Nymex when the same report showed that U.S. inventories had declined by 2.6 million barrels, surprising trader who expected stockpiles to grow by 900,000 barrels.

"Demand went positive for the first time in recent memory, over a year ago, so that's given us a little bit of support," said Phil Flynn, an analyst at Alaron Trading Corp. more...