Reply #6: Oil falls to $40 (huh?)

[UpInArms]

http://www.reuters.co.uk/newsPackageArticle.jhtml?type=businessNews&storyID=572059§ion=finance

LONDON (Reuters)

- London Brent crude has fallen briefly through $40 for the first time in three weeks, extending heavy losses to a fifth session as renewed exports from Iraq and higher-than-expected U.S. gasoline inventories encourage big-money funds to take profits.

London Brent crude fell 59 cents to $40.09 a barrel, having briefly touched a three-week low of $39.80.

U.S. light crude dropped 48 cents to $42.99 a barrel, after slumping $1.74, nearly four percent, on the New York Mercantile Exchange on Wednesday to its lowest close since August 4.

U.S. prices are now nearly $6.50, or 13 percent, below last week's record $49.40 high.

Prices have been helped lower by profit-taking by hedge funds, dealers said, following Wednesday's U.S. government oil supply report showing refiners producing enough gasoline to meet summer vacation driving demand.

"There's a mixture of trade and fund selling," said Prudential Bache broker Tony Machacek.

<snip>

On Wednesday, the U.S. government Energy Information Administration EIA.L latest stock report showed commercial gasoline stocks were steady at 205.7 million barrels in the week ended August 20, near the upper end of their 5-year average.

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Didn't they just say yesterday that stocks decreased?