Oil tumbles on high inventories

U.S. crude oil price tumbled on Wednesday as U.S. crude inventories rallied last week. The U.S. Energy Information Administration reported that U.S. oil inventories increased 4.7 million barrels in the week ended October 21. That reversed the decline of 4.7 million barrels in the previous week and went beyond analysts' estimates. The markets had expected that U.S. crude inventories would continue to go below the 5-year average. And in Europe, although euro-zone leaders would meet later Wednesday to deal with the debt crisis, doubts rose in the markets over the conclusion of a comprehensive deal as there was still deep disagreement on how to expand the European rescue fund. Moreover, the haircut on Greece's debt would continue to be the main stumbling block for a final resolution, hurting crude markets ' optimism. Light, sweet crude for December delivery fell 2.97 dollars, or 3.19 percent to settle at 90.20 dollars a barrel on the New York Mercantile Exchange, retreating from the 12-week high reached on the previous trading day. In London, Brent crude for December delivery also dropped and last traded around 109 dollars a barrel.