Feb. 10 (Bloomberg) -- Crude oil slid to a six-week low after a report that global oil producers will boost their capacity to pump oil this year, outpacing growth in demand.

High prices have bolstered investment that will lead to a 2.2 million-barrel-a-day increase in the amount of oil that can be produced, the Paris-based International Energy Agency said. Global consumption will rise 1.78 million barrels a day. Prices plunged this week after the Energy Department said U.S. oil and fuel inventories were above normal for this time of year.

``The IEA report confirms the bearish sentiment in the market,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``Inventories are more than adequate, but geopolitical worries have been supporting prices. We haven't heard anything inflammatory from Iran's president recently.''

Crude oil for March delivery fell 78 cents, or 1.3 percent, to $61.84 a barrel on the New York Mercantile Exchange, the lowest close since Dec. 30. Prices dropped 5.4 percent this week and are up 31 percent from a year ago.

Twenty-four of 56 analysts, traders and brokers, or 43 percent, predicted in a Bloomberg News survey that prices will drop next week. Nineteen forecast a gain and 13 expected little change. The survey, conducted yesterday, was the first this year in which more respondents expected a decline than a gain.

Brent crude oil for March settlement slipped $1.11, or 1.8 percent, to $59.64 a barrel on London's ICE Futures exchange. It was the lowest close since Dec. 30.

Shifting Balance

``The supply-demand balance is shifting,'' said Ben Dell, an analyst for Sanford C. Bernstein & Co. in New York. ``This is clearly the case with gasoline, and now things are getting a little looser with crude oil as well.''

Gasoline inventories jumped 4.3 million barrels to 223.3 million last week, according to a Feb. 8 Energy Department report. Supplies of the motor fuel have increased for six consecutive weeks, the longest streak in a year. Stockpiles are 4.6 percent above the five-year average.

``Gasoline has led the way lower,'' said Michael Fitzpatrick, vice president of energy risk management at Fimat USA Inc. in New York. ``High imports and expectations of a switch to gasoline production have led to concerns that supplies will swell as we go into the summer driving season.''

Gasoline for March delivery plunged 5.22 cents, or 3.5 percent, to $1.4621 a gallon in New York, the lowest close since Nov. 30. Prices fell every day this week for a total drop of 13 percent. It was the third-straight weekly decline.

Sinking Margins

The margin for turning three barrels of crude oil into two barrels of gasoline and one of heating oil fell to $2.095 a barrel, based on futures prices in New York. That is the lowest since Feb. 22, 1999.

Refiners lose 43.2 cents from turning a barrel of crude oil into gasoline, the first negative figure since October 1990. The margin has plunged from $31.708 on Sept. 1.

``You will see more maintenance at refineries and a cut in runs, which ultimately will lead to less gasoline,'' Dell said. ``Imports will also drop off as prices move lower.''

Gasoline imports jumped 27 percent to 1.2 million barrels last week, according to the Energy Department.

Crude oil prices got as high as $69.20 a barrel in New York last month amid concern that a dispute over Iranian nuclear research would lead to a cut in oil shipments. Iran, the fourth- biggest oil producer, was referred to the United Nations Security Council last week. The U.S. said last week that it wouldn't pursue sanctions at this time.

``Inventories of both crude and the products are overwhelming the market,'' said Jim Steel, director of commodity research at Man Financial Inc. in New York. ``Geopolitical concerns have supported prices but they seem to be fading into the background.''

Weekend Weather

Forecasts that a blizzard will hit the U.S. Northeast this weekend didn't prop heating-fuel prices because warm January weather allowed inventories to swell. New York City's average temperature in January was the highest since 1990, making the month the third warmest since records started in 1869, the National Weather Service said last week.

``The heating season is darn near over,'' Lynch said. ``Heating oil and natural gas inventories are extremely high.''

Heating oil inventories, which dropped 1.7 million barrels to 58 million last week, are still 18 percent higher than the five-year average. At 2.368 trillion cubic feet, natural gas stockpiles are 38 percent higher than normal,

Heating oil for March delivery fell 2.21 cents, or 1.3 percent, to $1.6426 a gallon in New York, the lowest close since Dec. 27. Futures fell 7.8 percent this week. They are 24 percent higher than a year ago.

Natural gas for March delivery fell 16.3 cents, or 2.2 percent, to $7.316 per million British thermal units in New York, the lowest close since July 25. Prices are down 54 percent since touching $15.78 on Dec. 13, an all-time high.

Oil and gas often move in tandem because as much as 10 percent of U.S. factories can switch fuels.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net

Last Updated: February 10, 2006 15:37 EST