NEW YORK (AP) -- Oil prices neared $60 per barrel Wednesday as the U.S. government reported that stockpiles of unused gasoline soared again.
Energy markets are undergoing an extended sell-off, the longest in 10 months, with new economic reports dampening optimism about any economic recovery.
Benchmark crude for August delivery fell more than 4 percent, or $2.79, to settle at $60.14 a barrel on the New York Mercantile Exchange. Prices came within a penny of $60 at one point.
In just more than one week, oil prices have fallen more than 18 percent.
"The recession is far from over," said analyst Stephen Schork. "Perhaps the run-up in prices was a bit overstated."
Crude prices by last week had more than doubled from lows reached January, when a barrel of crude cost slightly more than $30. That was just six months removed from record highs near $150 per barrel last summer.
Cheap oil sparked a new round of investment, as did the U.S. dollar which had been weakened by government efforts to bail out major banks and automakers.
Crude is priced in the dollar, so it effectively becomes cheaper internationally when the dollar falls.
Yet dismal economic data continues to emerge and the fundamentals of supply and demand appeared to take control of the market again, starting last week.
The International Monetary Fund on Wednesday lowered its global economic forecast, the latest suggestion that the global economy cannot support high energy prices. The Organization of Petroleum Exporting Countries predicted that demand for crude has fallen so sharply, it will take another four years to recover to 2008 levels.
Since peaking at $73.38 last Tuesday, crude futures have fallen by more than $13 per barrel. Gasoline, heating oil and natural gas futures are also tanking.
Americans are driving billions fewer miles (kilometers) than they had in recent years with millions losing their jobs.
Even though refiners have been slashing production, gasoline continues to pile up.
The Department of Energy reported Wednesday that gasoline in storage grew by another 1.9 million barrels last week, the fifth straight week that levels have grown.