US oil prices fell to a three-week low below $35 a barrel this evening, dragged down by an overhang of crude oil stocks in the US and concerns over the health of the global economy.
US crude dropped $1.30 to $34.64 a barrel, while Brent crude fell 18 cents to $44.10 a barrel. US crude has been running at a big discount to Brent due to a supply glut at the main US storage hub in Oklahoma.
The losses came after the US government yesterday reported a seventh straight weekly increase in nationwide crude inventories as the economic crisis crushes business and consumer fuel demand.
Crude oil stockpiles at Cushing, Oklahoma - the world's biggest storage hub and the delivery point for US crude futures - rose last week to record levels around 35 million barrels, near operational capacity.
Oil prices have tumbled more than 10% this week amid fears a US bank rescue plan will not go far enough to revive the financial sector.
Oil's losses were further exacerbated by a report on Wednesday from the International Energy Agency forecasting global demand would shrink this year by the largest amount since 1982.
