NEW YORK, Dec. 9 (Xinhua) -- Oil prices tumbled to a two-month low of 70 U.S. dollars on Wednesday after a buildup in fuel inventories exacerbated investors' concerns about weak demand.

    Light, sweet crude for January delivery shed 1.95 dollars, or 2.7 percent, to settle at 70.67 dollars a barrel on the New York Mercantile Exchange (NYMEX). Futures slip to as low as 70.13 dollars a barrel earlier in the session, the lowest level in two months.

    In London, Brent crude for January delivery tumbled 2.8 dollars, or 3.7 percent, to settle at 72.39 dollars on the ICE Futures Exchange.

    The greatest concern on Wednesday was back to the fundamentals. The U.S. Energy Department Energy Information Administration (EIA)reported that, during the week ending Dec. 4, gasoline stockpiles increased 2.25 million barrels to 216.3 million barrels.

    The increase was higher than the 1.5 million barrels analysts had expected and sent overall gasoline supply to 5.7 percent higher than same period last year.

    Meanwhile, inventories of distillate fuel, which includes diesel and heating oil, rose by 1.6 million barrels to 167.3 million barrels. Analysts expected distillate stocks to fall by 400,000 barrels.

    Investors largely shrugged off a surprising drop in crude stockpiles. Crude inventories fell by 3.8 million barrels, or 1.1 percent, to 336.1 million barrels. But it is still 4.4 percent above one year ago.

    Analysts believed that the size of the product buildup was surprising and somewhat bearish, which had clearly pressured on the crude price on Wednesday.

    The weekly report also shows that U.S. refineries ran at 81.1 percent of total capacity on average, a rise of 1.4 percentage points from the prior week. Analysts expected capacity to build to80 percent. Refiners often reduce crude oil inventories in December because some states levy taxes on the amount in storage at year end.

    Inventories continued to rise at Cushing, Oklahoma, the delivery point for NYMEX crude oil futures, which has been deepening the discount for prompt oil below forward prices. Inventories there rose 2.5 million barrels to 33.4 million barrels last week, according to the EIA report.

    Wednesday's EIA report made investors more concerned about the weak energy demand. Total U.S. daily fuel demand averaged 18.5 million barrels in the past four weeks, which is 3 percent lower than one year ago, according to the report. The market is cautious about the prospects of any pickup in consumption soon, as high unemployment and still fragile economy are forcing consumers and businesses to cut back on energy use.

    Oil prices' decline in the past six trading days was partly driven by a strengthening dollar. The greenback fluctuated on Wednesday, but by mid-afternoon when crude futures trading closed the dollar rose against the euro and sterling pound and added to the pressure on oil prices.