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The price of a barrel of crude oil fell to six-month low below $61 on Wednesday as U.S. government data showed that inventories are at healthy levels. Crude oil prices fell to $60.80 a barrel in trading in London today, reports Reuters. Other news keeping oil prices down:

* The Energy Department reported that distillate fuel inventories, which include heating oil, grew by a much higher than expected 4.1 million barrels to 146.7 million barrels. That’s more than 11% above last year’s inventory levels. The market places more emphasis on distillate fuels as the winter months approach. Economists polled by Reuters were looking for an addition of 1.9 million barrels on average.

* Gasoline inventories inched up by 600K barrels to 207 barrels. That’s 6% above year ago levels and should spell good news for gas prices in the US

* Crude oil inventories fell by 2.8 million barrels to 325 million barrels. However, that’s still 5% above last year’s levels and above the five-year average of inventories.

* “There is no support at all for crude oil coming from product markets,” Eoin O'Callaghan of BNP Paribas, tells Reuters. “We are seeing all the factors that supported the market in the summer unwind.”

* Crude prices were also talked down by news that the world’s largest exporter of oil is happy with the current price and concerns for Iran are waning.

* Saudi Arabia oil minister Ali al-Naimi told reporters in Riyadh, “The oil industry is convinced that this price is reasonable.”

* “Prices are now rewarding to both producers and consumers and their impact on the global economy is small,” he added.

* The fear of conflict with Iran over its nuclear program also eased after foreign ministers from the U.S., Russia, China, Britain, France, and Germany all agreed to give EU foreign policy chief Javier Solana additional time to negotiate a deal with Iran.

* “Clearly now a serious negotiation phase will follow so the chances that Iran's oil will be withdrawn from the market any time soon have gone from low to very low,” said Tobin Gorey, commodity strategist with Commonwealth Bank of Australia, to Reuters.

The pain could be felt a mile away in the Oil Services ETF (OIH). I managed to get a short on after the inventories came out and did quite well.

OIH is the most volatile and heavily traded oil ETF. Place your directional bets on oil with that.

Source: Oil Hits 6-Month Low; Oil Services ETF A Profitable Short