Oil drops for 4th day on big rise in US supplies

Associated Press

NEW YORK (AP) — The price of oil fell Wednesday after the U.S. reported an unexpectedly large increase in crude supplies.

Oil supplies grew last week by 5.9 million barrels, or 1.6 percent, the Energy Department said. At 375.1 million barrels, the nation's oil inventory is 11.1 percent above year-ago levels. Analysts expected a much smaller increase.

Benchmark oil fell 94 cents, or about 1 percent, to finish at $85.73 per barrel. The price has dropped almost 7 percent since closing Thursday at $92.10. Brent crude fell 40 cents to end at $107.85 per barrel in London.

Drivers are seeing lower prices at the gas station. The nationwide average for a gallon of regular has dropped 13 cents from a week ago, to $3.63. That's the biggest 7-day drop since late November, 2008, according to Oil Price Information Services analyst Fred Rozell.

Jim Ritterbusch of Ritterbusch and Associates said the oil market may be looking forward to Friday's initial estimate of U.S. third-quarter gross domestic product. "Any additional indications of weakening in the world's largest economy could force further liquidation out of the oil space," he said.

In other futures trading in New York:

— Wholesale gasoline fell less than a penny to finish at $2.60 per gallon. Gasoline supplies grew by 1.4 million barrels to 198.6 million barrels last week, the government said.

— Heating oil also fell less than a penny to end at $3.04 per gallon.

— Natural gas fell 8.5 cents to finish at $3.45 per 1,000 cubic feet, reversing Tuesday's gains.

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