Oil Drops Towards $60 on Gasoline Buildup

Oil prices fell towards 60 U.S. dollars a barrel on Wednesday as rising gasoline inventories and dismal economic forecasts put more pressures on the market.

Light, sweet crude for August delivery fell 2.79 dollars, or 4.4 percent, to settle at 60.14 dollars a barrel on the New York Mercantile Exchange. Oil prices have dropped almost 16 percent after six consecutive losses, the longest sell-off this year.

According to the U.S. Energy Department's Energy Information Administration (EIA), gasoline inventories rose another 1.9 million barrels for the week ended July 3, the fifth straight week that storage levels have grown, indicating the consumers were cutting their fuel consumptions in the traditional summer driving season.

Meanwhile, the Organization of Petroleum Exporting Countries (OPEC) predicted in its annual report on Wednesday that demand for crude would not recover to 2008 levels until 2013, dampening the hope for a rapid demand pickup along with the economic recovery.

Also adding to oil's losses was the news that the International Monetary Fund (IMF) on Wednesday lowered its global economic forecast for the year of 2009, the latest proof that the economic condition could not support high energy prices at this stage.

In London, Brent crude for August delivery dropped 2.77 dollars to 60.46 dollars a barrel on the ICE Futures exchange.