Oil falls to near $75 amid high crude supplies

SINGAPORE -- Oil prices fell to near $75 a barrel Thursday in Asia amid stubbornly high U.S. crude inventory surpluses even after a drawdown of the stockpile last week.

Benchmark crude for October delivery was down 56 cents to $75.46 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract lost 78 cents to settle at $76.02 on Wednesday.

U.S. crude stocks fell by 2.5 million barrels last week, the Energy Department's Energy Information Administration said Wednesday. But despite the decline, crude supplies are still 7.4 percent above year earlier levels, suggesting oil demand remains sluggish.

"The increases in those surpluses cannot just be dismissed, regardless of the week-on-week improvements," Cameron Hanover said in a report. "There is still more oil than there has been for nearly three decades."

News that a pipeline shut near Chicago will soon restart also weighed on prices. Enbridge Energy Partners said its 670,000 barrel per day pipeline, which brings crude from Canada to the U.S. Midwest, would return to service early Friday after it was shut down shortly after a leak was discovered Sept. 9.

In other Nymex trading in October contracts, heating oil was down 0.83 cent at $2.124 a gallon and gasoline fell 1.30 cents to $1.953 a gallon. Natural gas rose 1.6 cents to $4.011 per 1,000 cubic feet.

In London, Brent crude for November delivery dropped 50 cents to $78.92 a barrel on the ICE Futures exchange.