THE START OF THE BURST: CRUDE SUPPLIES UP - AND PRICES DOWN

MARKETWATCH: U.S. crude supplies log first rise in six weeks

U.S. sees crude prices trending lower in long-range forecast

Crude-oil futures dropped as much as $5 a barrel Wednesday after a government report showed that supplies of crude rose unexpectedly for the first time in six weeks and demand for petroleum products have fallen more than 2% in the past month.

"We are beginning to see the early signs of demand destruction here in the United States," said Chris Lafakis, an associate economist at Moody's Economy.com. "Facing already formidable headwinds, consumers are curtailing consumption of gasoline given record prices."

Crude prices traded at their lowest level in more than two weeks, with traders also awaiting the Federal Reserve's decision on interest rates due later in the session.

... U.S. crude supplies climbed by 800,000 barrels to 301.8 million for the week ended June 20, according to the Energy Department's Energy Information Administration Wednesday.

It was the first reported rise since early May. Supplies had fallen a total of nearly 25 million in five weeks. And analysts surveyed by Platts were looking for a decline of 1.7 million, on average.

The American Petroleum Institute reported a 1.6 million-barrel increase to 305.8 million in crude inventories.

• ONE REASON CRUDE SUPPLIES HAVE NOT RISEN EARLIER IS THAT DEMAND WAS SLACKENING AND REAL BUYERS PUT OFF PURCHASES BECAUSE PRICES WERE TOO HIGH.

• AS PRICES DECLINE THE INVENTORIES WILL GROW AND THIS WILL CAUSE A RAPID DECLINE OIF NOT COLLAPSE OF OIL PRICES. A RUSH FOR THE EXIT.

SOONER THAN YOU THINK.