Oil Prices Fall Below $34 on Crude Glut

New York, NY, Jan. 20, 2009--Oil prices fell below $34 a barrel Tuesday in Asia due to a lack of space at a key U.S. storage facility.

Light, sweet crude for February delivery was down 65 cents at $33.90 a barrel by late afternoon in Singapore in electronic trading on the New York Mercantile Exchange. The contract, which expires on Tuesday, fell $1.96 overnight to settle at $34.55.

The February contract has fallen about a third in two weeks, in part because burgeoning supplies in Cushing, Oklahoma have left traders with little space to store crude, forcing them to sell.

Traders say some oil firms are storing crude on rented tankers.

"There's too much oil in the world right now, and that oil is trying to find a home," said Stephen Corry, head of investment strategy for Merrill Lynch in Hong Kong.