Crude oil retreats despite U.S. inventory drop

Special Report:Global Financial Crisis

NEW YORK, Dec. 3 (Chinese media) -- Crude oil continued to

fall on Wednesday despite a surprising decline in the U.S. crude stockpiles.

Light, sweet crude for January delivery fell 17 cents

to settle at 47.79 U.S. dollars a barrel on the New York Mercantile Exchange.

Price initially rose to as high as 48.10 dollars a

barrel after the U.S. Energy Department Energy Information Administration (EIA)

reported a drop of 400,000 barrels in crude inventory last week. The market had

predicted it to rise 2 million barrels. Meanwhile, the gasoline and distillate

supplies also posted unexpected declines.

But investors are more concerned about the slumping

demand. The EIA report showed that the U.S. fuel consumption continued to

contract, with daily fuel demand in the past four weeks averaged 19.27 million

barrels, 6.2 percent down from one year ago.

In London, Brent crude for January delivery edged up

18 cents to 45.62 dollars a barrel on the ICE Futures

Exchange.