Oil falls to near $94 a barrel on ample supplies

The price of oil fell below $95 a barrel Wednesday as investors worried about ample supplies ahead of a meeting of the world's key exporters of crude.

By early afternoon in Europe, benchmark oil for July delivery was down 66 cents to $94.35 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 86 cents to close at $95.01 a barrel in New York on Tuesday. It was the first gain for oil in five trading sessions.

Positive signs for the U.S. economy helped oil prices break a falling streak on Tuesday. U.S. home prices rose the most in seven years and consumer confidence reached a five-year high. But the reality of ample supplies and run-of-the-mill demand worked in tandem to keep energy prices in check, traders said.

"We all know that the US supply is near record highs and demand is playing catch up as slow as the economy is recovering," said Carl Larry of Oil Outlooks and Opinions. "So now we're stuck with moderate demand, consistent and steady supply and no real worry about where the next barrel of oil is coming from."

Also weighing on prices were expectations that the Organization of Petroleum Exporting Countries, which is meeting Friday at its headquarters in Vienna, will keep its official production target steady at 30 million barrels a day, even though its output has been surpassing that voluntary limit for many months.

The latest information about U.S. stockpiles of crude and refined products is also on the horizon.

Data for the week ending May 24 is expected to show draws of 1.5 million barrels in crude oil stocks and of 800,000 barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

The American Petroleum Institute will release its report on oil stocks later Wednesday, while the report from the Energy Department's Energy Information Administration — the market benchmark — will be out on Thursday. Both reports come a day later than usual because of Monday's Memorial Day holiday.

Analysts said oil prices were also supported by the possibility that the conflict in Syria could escalate should EU countries start providing weapons to rebel forces. The EU decided Monday to let its arms embargo against Syria expire, but no weapons shipments from European countries are expected in the near future.

"There is therefore no end in sight to the civil war in Syria, a country which plays a key role in terms of regional stability," said a report from Commerzbank in Frankfurt. "This indicates that the risk premium on the oil price may well rise."

Brent crude, a benchmark for many international oil varieties, was down 36 cents to $103.87 a barrel on the ICE Futures exchange in London.

In other energy futures trading on Nymex:

— Wholesale gasoline dropped 1.35 cents to $2.8319 a gallon.

— Heating oil fell 0.9 cent to $2.895 per gallon.

— Natural gas shed 1.6 cents to $4.158 per 1,000 cubic feet.

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Pamela Sampson in Bangkok contributed to this report.