Higher inventories send oil prices lower

Crude oil prices fell Wednesday after the US Energy Information Administration reported that inventories of crude oil and distillates rose rather than falling as expected last week, and that gasoline stockpiles fell less than had been expected during the week.

West Texas Intermediate crude for July delivery was $2.43 lower to $66.12 per barrel at the close of floor trade on the New York Mercantile Exchange after trading 75 cents lower before the EIA’s report was released.

Inventories of crude oil were 2.9 million barrels higher in the week ending 29 May, against an expected decline of 2 million barrels, while gasoline stockpiles fell by 200,000 barrels and distillates, including heating oil and diesel fuel, added 1.6 million barrels to storage during the week.

Gasoline inventories had been expected to drop by 1.5 million barrels, while distillates had been expected to see stockpiles delcine by 950,000 barrels.

Also helping prices lower was a report from the Organization of Petroleum Exporting Countries that its output was up slightly in May.

Nymex July gasoline futures fell 3 cents to $1.77 per gallon during the day, while July heating oil was 6 cents lower to $1.74 per gallon and July natural gas dropped 35 cents to $3.77 per million British thermal units.

Meanwhile, the retail price of gasoline in the United States was up 2.3 cents overnight to $2.548 per gallon on average nationally, according to AAA.