By Mark Shenk Nov. 19 (Bloomberg) -- Crude oil futures fell after a U.S. Energy Department report showed that inventories climbed more than forecast as fuel demand dropped. Supplies rose 1.6 million barrels to 313.5 million barrels last week, the Energy Department said. Stockpiles were forecast to rise 1 million barrels, according to a Bloomberg News survey of analysts. U.S. fuel demand during the past four weeks averaged 19.1 million barrels a day, down 7 percent from a year ago. “Across the range of petroleum products we are seeing major declines in U.S. demand,” said Rachel Ziemba, an analyst at RGE Monitor, an economic research company in New York. “We are looking forward to negative oil-demand growth next year because of the economy.” Crude oil for December delivery fell 78 cents, or 1.4 percent, to $53.61 a barrel at 11:29 a.m. on the New York Mercantile Exchange. Prices touched $53.30 today, the lowest since Jan. 23, 2007. Futures have dropped 64 percent since reaching a record $147.27 on July 11. Gasoline inventories rose 539,000 barrels to 198.6 million barrels in the week ended Nov. 14, the report showed. Analysts surveyed by Bloomberg news were split over whether supplies of the motor fuel increased or declined. ‘Shooting for $50’ “The market is shooting for $50,” said Dan Flynn, an energy analyst at Alaron Trading Corp. in Chicago. “Prices should continue to slide, given demand and the anticipated worsening of the economy.” Speculation that the recession will further curb demand is helping send prices lower. U.S. housing starts and permits for future construction both dropped to record lows in October, signs the housing downturn may extend into a fourth year. Construction starts on housing fell 4.5 percent in October, less than economists forecast, to an annual rate of 791,000 that was the lowest since records began in 1959, the Commerce Department said in Washington. Declines in construction spending “What oil prices do in the months ahead depends more on the economy than anything else,” said Steve Maloney, a risk- management consultant for Stamford, Connecticut-based Towers Perrin. “Until we have hope of an economic rebound, prices are going to stay under pressure.” Brent crude oil for January settlement declined 34 cents, or 0.7 percent, to $51.50 a barrel on London’s ICE Futures Europe exchange. To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.

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