Oil Drops Below $34 a Barrel

Oil prices fell to near a five-year low Thursday, dropping almost $2 to below $34 a barrel as inventories rose to a seven-year high, Bloomberg reported.

Benchmark light sweet crude futures fell $1.96 to close at $33.98 a barrel on the New York Mercantile Exchange, Bloomberg said.

Oil inventories reached an 82-week high last week, the Department of Energy reported in its weekly inventory report.

Retail gasoline prices, however reached a new high for 2009 and appeared headed back to $2 a gallon as refiners cut back on production, the Associated Press reported.

Oil has fallen 20% since Monday and is down more than $110 since topping out at a record closing price of $145.29 barrel last July 3.