Oil fell to a two-month low in New York after a government report showed that U.S. crude output climbed to the highest level in more than 15 years and fuel consumption decreased.
Futures dropped as much as 3.5 percent after the Energy Department said crude output rose 11,000 barrels a day to 6.52 million last week, the most since December 1996. Total fuel demand fell 0.3 percent to 18.3 million barrels a day in the four weeks ended Sept. 28, the lowest level since April. Gasoline supplies increased as stockpiles of crude oil and distillate declined.
Crude oil for November delivery declined $3.02, or 3.3 percent, to $88.87 a barrel at 11:07 a.m. on the New York Mercantile Exchange. Oil traded at $89.62 a barrel before release of the inventory report at 10:30 a.m. Futures touched $88.64, the lowest level since Aug. 3.
Brent oil for November settlement decreased $3.06, or 2.7 percent, to $108.51 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $19.64 to the New York-traded West Texas Intermediate grade, down from $19.68 yesterday.
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