Oil gave up early gains and hovered around $92 per barrel on Wednesday after the government reported a bigger-than-expected increase in United States 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 afternoon 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.
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 cents to $3.17 per gallon, natural gas gained 5 cents to $3.48 per 1,000 cubic feet and wholesale gasoline fell 6 cents to $2.79 per gallon.
– AP
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