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Oil Prices Drop More than $6


Oil prices have plummeted for a second day in a row, following a report on U.S. oil inventories.

The price of crude oil in New York dropped more than six dollars in trading Wednesday, falling below $133 a barrel, before easing upward.

The movement followed a U.S. Energy Department report saying the country's supplies of crude oil rose by almost three million barrels last week.

Oil prices fell sharply Tuesday on concerns that a slowing U.S. economy will decrease demand for oil.

The price of crude oil in New York at one point Tuesday fell more than nine-dollars a barrel in New York trading, the biggest one-day drop in dollar terms in 17 years.

Earlier, Saudi Arabian King Abdullah told an Italian newspaper that his country, a major oil producer, wanted to see lower prices, saying such high prices were not in anyone's best interest.

Federal Reserve Chairman Ben Bernanke warned lawmakers Tuesday that the U.S. economy faces the dual threat of slowing growth and inflation. Analysts say that points to lower U.S. demand for oil in the future.

Meanwhile, the OPEC oil cartel cut its forecast for global oil demand Tuesday due to faltering economic growth in industrialized nations and an increase in conservation measures.

OPEC predicted oil consumption will rise by just over one million barrels a day this year, 70,000 barrels a day less than initially forecast. The cartel says the drop in demand will be the biggest since 2002.

Oil prices hit a record high of $147.27 a barrel in New York on Friday.

Some information for this report was provided by AP and Reuters.