Oil prices fell on Wednesday after the government reported that stocks of crude are still running much higher than usual for this time of year.
Benchmark crude fell 62 cents to finish at $87.88 per barrel on the New York Mercantile Exchange.
Oil prices were higher earlier in the day. But a weekly report from the Energy Information Administration showed that inventory has barely moved at the key oil hub in Cushing, Okla. That suggests that most refiners have all the supply they need for now, driving prices lower.
Nationally, inventories fell 2.4 million barrels last week, more than the 1.25 million barrel decline expected by analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos. Still, inventories are well above average for this time of year, the EIA said. And inventories of gasoline and blending components both rose last week.
In addition Platts noted that gasoline stocks were higher in all regions of the U.S. and above the five-year average. Meanwhile, the EIA report suggested that demand for gasoline was lower, Platts said.
Gasoline prices at the pump fell slightly to a national average of $3.38 per gallon, according to AAA.
Brent crude, which is used to price international varieties of oil, fell $1.03 to end at $108.81 per barrel on the ICE Futures exchange in London.
Also Wednesday the EIA issued a long-term report predicting that U.S. crude oil production will rise to 7.5 million barrels per day in 2019, up from less than 6 million barrels per day in 2011. It also predicted that gasoline consumption will be lower than previously estimated because of higher fuel efficiency standards for cars. Growth in diesel consumption will be curbed by increased use of natural gas in trucks, the report predicted.
In other energy futures trading on the Nymex:
— Heating oil fell 1.3 cents to finish at $2.9907 a gallon.
— Natural gas added 16.1 cents to end at $3.7000 per 1,000 cubic feet.
— Wholesale gasoline fell 5.12 cents to $2.6378 a gallon.