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Oil prices settle lower after supply report

Oil prices settle lower after supply report

March 9th, 2011 in News

Oil prices fell Wednesday as a key government report showed U.S. petroleum supplies increased last week. Energy traders meanwhile continued to watch developments in Libya, where weeks of unrest showed no signs of easing.

Benchmark West Texas Intermediate crude for April delivery lost 64 cents to settle at $104.38 a barrel on the New York Mercantile Exchange. In London, Brent crude rose $2.88 to settle at $115.94 per barrel on the ICE Futures exchange.

The report from the Energy Department's Energy Information Administration showed crude oil supplies grew by 2.5 million barrels. That's about what analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., expected.

Gasoline supplies fell by 5.5 million barrels, almost twice the amount analysts forecast. Distillates, which include diesel and heating oil, shrank by four million barrels, also twice as much as analysts estimated. The nation's refineries operated at 82 percent of capacity, slightly above expectations.

PFGBest analyst Phil Flynn attributed the steep decline in gasoline supplies to refiners who were getting rid of winter blends as they switch to summer formulas intended to reduce smog.

At the gas pump prices continued to climb, reaching a national average of $3.524 for a gallon of regular on Wednesday, according to AAA, Wright Express and the Oil Price Information Service.

The highest prices ranged from $3.583 to $3.929 a gallon, primarily along the West Coast, and in Illinois, Maine and New York. The cheapest prices - between $3.215 and $3.411 a gallon - were found in the Rockies and parts of the Midwest.