Global oil prices fell Wednesday October 24, 2012, with New York crude hitting the lowest level since July, as surging US crude stocks and weak European economic data sparked fresh demand concerns, analysts said.

New York's main contract, light sweet crude for December, sank as low as $85.22 -- the lowest point since July 12. It later stood at $85.42, which marked a large drop of $1.25 from Tuesday's closing level.

Brent North Sea crude for delivery in December dropped 68 cents to $107.57 per barrel in late afternoon London deals.

The oil market had risen in earlier deals as sentiment was lifted partly by upbeat manufacturing figures from Asian powerhouse nation China.

However, those gains were wiped out as traders reacted to downbeat European data and surging US oil reserves.

The US government's Department of Energy revealed that American oil inventories soared by 5.9 million barrels to 375 million barrels in the week to October 19.

That was more than three times market expectations for a gain of 1.8 million barrels, according to analysts polled by Dow Jones Newswires.

Rising stockpiles are widely regarded as a key indicator of weak demand in the United States, which is the world's biggest crude consuming nation.

Adding to negative sentiment was news that German business confidence slumped to a two-and-a-half-year low in October.

"Oil prices initially enjoyed somewhat of a firmer tone today on the better earnings reports out of both the US and Europe, as well as the firmer tone in equity markets today, but crude inventories came out at 5.9 million barrels well above expectations, turning prices lower," said CMC Markets analyst Michael Hewson.

"The bounce has been more of the dead cat variety given the poor economic data," he added.