Energy investors had better hope that China continues to burn through more and more crude oil, because the United States sure isn't going to. The latest report from the U.S. Energy Department showed that oil inventories rose more than 3 million barrels last week, higher than forecast.

Previously, rising inventories had been blamed on so-called demand destruction, where the high price of energy forced consumers to cut back. Now, with the price of crude oil less than half of what it was in July, the slowing economy is getting the blame.

Crude oil fell to $68 (U.S.) a barrel on Wednesday, down more than $4. It traded as high as $147 a barrel in July.

“Interestingly, even with the inventory builds we have seen in recent weeks, current levels of all three commodities [crude oil, gasoline and distillates] remain below average,” said Bespoke Investment Group, on its Think B.I.G. blog. “Although judging by their trading action, continued builds in inventory levels are probably on the horizon.”

Indeed, a consultant at Morgan Stanley believes that things are going to get worse well into 2009. According to Bloomberg News, Sadad Al-Husseini suggested that world oil demand will fall to as little as 83.5 million barrels a day in the second quarter of 2009, down from 85.7 million barrels a day in the third quarter of 2008.

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