Oil Price Falls as U.S. Gasoline Supply Grows

(AP)
NEW YORK
The price of oil fell 1 percent Wednesday after the government reported a large buildup in supplies of gasoline and distillate fuels such as diesel.

Benchmark oil for January delivery dropped $1.07 to close at $97.44 on the New York Mercantile Exchange. Oil had jumped $1.17 to $98.51 on Tuesday, its highest level in six weeks.

Gasoline supplies rose by 6.7 million barrels, the Energy Department said, while distillate supplies increased by 4.5 million barrels in the week ended Dec. 6. Both increases were more than three times what analysts were expecting, raising the possibility that refiners would slow production and purchases of oil in the coming weeks.

The fuel increases overshadowed a huge decline in oil supplies of 10.6 million barrels.

Oil has fallen from $110 in September on high supplies, muted demand and a lessening of Middle East tensions. It sank to nearly $92 late last month but has since crept higher as the U.S. and Chinese economies show signs of sustained recovery.

At the gas pump, the average price for a gallon of gasoline held steady at $3.26 a gallon. That’s unchanged from a week ago and down 7 cents from this time last year.

Brent crude, a benchmark for international crude, rose 32 cents to $109.70 a barrel on the ICE Futures exchange in London.

In other energy futures trading on Nymex:

-Wholesale gasoline dropped 2 cents to $2.66 a gallon.

-Heating oil was flat at $3.02 a gallon

-Natural gas rose 10 cents to $4.34 per 1,000 cubic feet.

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Pablo Gorondi in Budapest contributed to this report.