NEW YORK (AP) -- Oil prices tumbled below $67 a barrel to 16-month lows Wednesday after the government reported big increases in U.S. fuel supplies -- more evidence that the economic downturn is drying up energy demand.

The Energy Information Administration said crude inventories jumped by 3.2 million barrels last week, above the 2.9 million barrel increase expected by analysts surveyed by energy research firm Platts. Gasoline inventories rose by 2.7 million barrels last week, and inventories of distillates, which include heating oil and diesel, rose by 2.2 million barrels.

Over the last four weeks, the EIA said, motor gasoline demand was down 4.3 percent from the same period last year. Distillate fuel demand was down 5.8 percent, and jet fuel demand was down 9.2 percent.

"The main theme here that's driving this market into new low ground is demand deterioration," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates. "As we begin to see evidence that demand is leveling -- it doesn't have to increase, just level -- then we can start discussing a possible price bottom. But it appears premature at this point."

Light, sweet crude for December delivery fell $5.43 to settle at $66.75 on the New York Mercantile Exchange, after falling as low as $66.20. It was the lowest close for a front-month contract since June 13, 2007, when crude settled at $66.26.

The energy markets have also been weighed down by the weak stock market, as investors grow more pessimistic about how long it will take the economy to recover from the current global financial turmoil.

EW YORK (AP) -- How could a $24 billion loss possibly be good news? When it comes from Wachovia as an effort to primp itself for its acquisition by Wells Fargo.

Wachovia Corp.'s staggering loss for the third quarter resulted primarily because it wrote down the value of intangible assets by almost $19 billion and built up its loan loss reserves by $4.8 billion, moves that seemed to please its suitor.

"It was prudent for Wachovia to put these losses behind them," said Wells Fargo Chief Financial Officer Howard Atkins in a release. "The asset write-downs, reserve build, and other items are consistent with our acquisition assumptions."

The moves tidy up Wachovia's balance sheet so that it is more in line with that of the more conservative Wells Fargo, analysts said. At the same time, Wells Fargo can use the losses reported by Wachovia to shelter years of profits after it acquires the Charlotte, N.C.-based bank.

Late last month, the Internal Revenue Service issued a surprise ruling that boosts banks' ability to offset the losses from loans and other bad debts held by banks they acquire. The guidance allows banks to take larger tax write-offs against future profits and makes the bargain-basement $14 billion all-stock Wachovia deal all the more attractive for San Francisco-based Wells Fargo.

The ruling removes any limitation on how much a company can offset its income with the losses of an acquired company, said Walter Pagano, a partner at Eisner LLP and a former IRS revenue agent. Under the old ruling, companies could only write off a small portion of the losses, limiting how much of a tax