By Mark Shenk Oct. 16 (Bloomberg) -- Crude oil futures fell below $70 a barrel after a U.S. government report showed a bigger-than- forecast increase in inventories. Supplies rose 5.6 million barrels to 308.2 million barrels in the week ended Oct. 10, the Energy Department said today in a weekly report. Inventories were forecast to rise 2.6 million barrels, according to the median of analyst estimates in a Bloomberg News survey. Crude oil for November delivery fell $4.50, or 6 percent, to $70.04 a barrel at 11:14 a.m. on the New York Mercantile Exchange. Oil fell as low as $69.15 a barrel after release of the supply report. Oil traded at $72.24 a barrel before the release of the report at 11 a.m. in Washington. Oil also fell on doubts that the rescue plan for banks will be enough to bolster global economic growth and fuel use. Industrial production in the U.S. fell in September by the most in almost 34 years as hurricanes and an aircraft strike combined with the credit crunch to weaken manufacturing. The 2.8 percent decrease in production at factories, mines and utilities exceeded forecasts and followed a revised 1 percent decrease in August, the Federal Reserve said today. ``Commodities have gone from a leading asset class to a follower in just two months,'' said Christopher Edmonds, the managing principal of FIG Partners Energy Research & Capital Group in Atlanta. ``Two months ago you would look at the oil market for a signal about the direction of other markets. Today you look at equities to get an idea where oil will go.'' Lower Forecast Credit Suisse Group and Sanford C. Bernstein & Co. slashed their oil-price forecasts for next year as tightening credit conditions and slowing economic growth eroded fuel demand. Bernstein lowered its crude oil price forecast to $70 a barrel from $90 in 2009 and cut the 2010 estimate to $80 from $95 a barrel, according to a report today. Zurich-based Credit Suisse reduced its next-year estimate by 32 percent to $75. The ``ideal'' price for crude oil is between $70 and $90 a barrel, Organization of Petroleum Exporting Countries President Chakib Khelil said today. OPEC hasn't decided the size of an output cut it may opt for at a meeting in Vienna on Nov. 18, Khelil told reporters at the Hassi Rmel gas fields. ``No-one can say how much,'' said Khelil, who also doubles as Algeria's oil minister. ``The decision is made in the To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.

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