WASHINGTON -- Oil prices fell by more than $1 a barrel yesterday after the US government released data showing healthy crude inventories and a surge in domestic fuel supplies .
The selling briefly took oil prices below $60 a barrel -- the level OPEC has hinted could initiate an output cut.
Even if the Organization of Petroleum Exporting Countries doesn't cut production , Alaron Trading Corp.'s Phil Flynn said he could see prices moderating once winter fuel demand kicks in or traders start ``bargain hunting."
In its weekly report, the Energy Department said the nation's inventory of distillate fuel grew by more than 4 million barrels, a sign that refiners are ramping up output of refined products that will be in greater demand in the coming months and therefore command higher prices than gasoline.
Fall is traditionally the peak delivery season for the diesel-thirsty trucking industry, but analysts have warned in recent weeks that shipping volumes are not robust. Airlines have also retrenched in the face of decreasing passenger traffic, according to the Air Transport Association.
The latest Energy Department data showed distillate fuel inventories growing more than 11 percent above year-ago levels. Gasoline inventories increased 6 percent above year-ago levels.
Unleaded gasoline futures, meanwhile, fell 3.67 cents to settle at $1.4671 a gallon on the New York Mercantile Exchange .