Oil prices fall as supplies rise
Oil prices hovered around $92 per barrel Wednesday after the government reported a bigger-than-expected increase in US crude supplies. Extra gasoline in storage projected lower demand, pushing oil prices down.
In this Tuesday, Oct. 9 file photo, a Chevron station posts gasoline prices starting at $5.50 per gallon in downtown Los Angeles. Oil prices fell Wednesday due to a high US supply level.
Redd Saxon/AP/File
Oil prices gave up early gains and hovered around $92 per barrel on Wednesday after the government reported a bigger-than-expected increase in U.S. crude supplies.
Supplies rose by 2.9 million barrels last week. That was almost double what analysts had forecast, according to Platts, the energy information arm of McGraw-Hill Cos.
Gasoline supplies also rose. Analysts had predicted a decline.
The extra gasoline and oil in storage tends to push prices down, because it suggests that there's enough to go around, or that demand is low.
In midday trading on Wednesday, oil was down 7 cents to $92.02 per barrel on the New York Mercantile Exchange.
Oil had been trading above $92 per barrel earlier in morning, as European stocks had a positive day, and hopes grew that Spain might be on the verge of requesting a bailout.
Gasoline prices at the pump fell almost 2 cents, to $3.756 per gallon, according to AAA.
The waffling oil prices matched stock indexes that are also mixed in midday trading. Technology giants IBM and Intel both said customers are holding back. Economic weakness generally means less demand for oil, pushing prices down.
Brent crude, which is used to price international varieties of oil, fell 80 cents to $113.20 a barrel on the ICE Futures exchange in London.
In other energy futures trading on the Nymex:
— Heating oil fell 2 cent to $3.17 per gallon.
— Natural gas gained 5 cent to $3.48 per 1,000 cubic feet.
— Wholesale gasoline fell 6 cents to $2.79 per gallon.