Oil falls as dropping risk assets outweigh signs of tight market

Oil fell along with equity markets on the U.S. debt-rating downgrade and a report showing a hot labor market, outweighing an industry estimate that pointed to a record drawdown in U.S. crude inventories.

The American Petroleum Institute reported that nationwide crude stockpiles plunged 15.4 million barrels last week, according to people familiar with the figures. If confirmed by government dUata later Wednesday, that would be the biggest decline in volume terms in figures going back to 1982.

The API estimates also signaled another drop in crude holdings at the key storage hub of Cushing, Oklahoma, as well as declines in inventories of gasoline and distillates.