Oil falls $1 to four-month low on US stockpiles

Oil prices fell more than $1 a barrel on Thursday to a four-month low under $58 as bulging US crude stocks piled pressure on investors to sell. US light crude oil last traded down $1.13 at $57.80 a barrel, after sinking to $57.40, its weakest level since July 22. London Brent crude was down $1.23 at $55.65.
Oil prices have dropped more than $13 from a late-August record above $70 as signs of weakening oil demand growth and rising inventories in the United States offset hurricane damage in the US Gulf.
"We see the bulls under increasing pressure to finally just give it up and let the market fall," said Tim Evans, an analyst with IFR Energy Services in the United States.
The weakness could prove temporary, however, if the Northern Hemisphere winter turns colder than normal after an unusually mild start, the International Energy Agency said.
World energy demand emerged largely unaffected following a violent hurricane season in the Atlantic, IEA said in a monthly report.
"The market has coped very well with the hurricane situation on the surface, particularly on the refinery side," said Lawrence Eagles, head of the markets division at the IEA.
But the agency said the risk remains that prices could spark higher, especially if temperatures fall below normal during the winter as many forecasters have predicted.
Crude supplies in the world''s biggest consumer rose by a greater-than-expected 4.5 million barrels last week, building inventories to nearly 13 percent above last year, the US Energy Information Administration said on Wednesday.
The build in crude stocks offset a decline in heating oil stocks, though they remain 4 percent higher than last year.
Top oil exporter Saudi Arabia may fail to meet its 2009 target for raising output capacity by 1.5 million barrels per day (bpd) due to a shortage of oil rigs and equipment, a former top official at state oil firm Saudi Aramco told Reuters.
But in the short term, oil cartel Opec is expected to raise its production capacity to 32.1 million bpd by year-end and to 33 million bpd by the end of 2006.