Energy futures fell today, at times dropping below $90 a barrel after the government said crude oil supplies jumped unexpectedly last week...
NEW YORK — Energy futures fell today, at times dropping below $90 a barrel after the government said crude oil supplies jumped unexpectedly last week.
In its weekly inventory report, the Energy Department’s Energy Information Administration (EIA) said crude oil inventories rose by 4.3 million barrels last week, the first increase since the week ended Nov. 9. Analysts surveyed by Dow Jones Newswires on average expected a decline of 300,000 barrels.
“The crude number was pretty surprising,” said Brad Samples, a commodities analyst at Summit Energy Services Inc. in Louisville, Ky., who added that crude supplies could be set to rise further. “This could be a turning point.”
Supplies of gasoline and distillates, which include heating oil, rose last week roughly in line with expectations.
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Light, sweet crude for February delivery fell $1.78 to $90.12 a barrel on the New York Mercantile Exchange after falling as low as $89.26 earlier. It was the first time since Dec. 19 the price of crude fell below $90.
Today was also the first time in several sessions that concerns about the economy weren’t the main driver behind falling oil prices, although there were more signs of economic cooling when the Federal Reserve said industrial output was flat in December.
Investors also mulled an International Energy Agency report that slightly cut world oil demand growth predictions for this year to 2.3 percent. The report said that forecast could change if an economic slowdown crimps U.S. demand. A weakening U.S. economy would only be partially offset by strong economic growth in China and the Middle East, the Paris-based organization said.
The Energy Department report offered a mixed demand picture. Gasoline demand fell last week by 188,000 barrels, but rose 1.2 percent over the last four weeks from the same period last year.
“I think the market will remain very focused on demand,” said Linda Rafield, senior oil analyst at Platts, the energy research arm of McGraw-Hill.
At the pump, meanwhile, gas prices slipped 0.7 cent today to a national average of $3.054, according to AAA and the Oil Price Information Service. Gas prices have been in retreat lately, following oil’s tumble from a record $100.09 a barrel two weeks ago.
The EIA report did contain some data that some traders might consider supportive of prices. For instance, refinery activity plummeted by 4.2 percent last week to 87.1 percent of capacity.
Some of the surprise jump in oil supplies was due to crude imports, which rose last week by an average of 583,000 barrels a day to 10.4 million barrels a day. Some analysts have expected such an increase, speculating that many companies kept some oil tankers out to sea at the end of last year to reduce their inventory tax burdens.
“Tankers that sat offshore at the end of last year for tax purposes are now starting to unload,” Rafield said.
Associated Press reporters George Jahn in Vienna and Gillian Wong in Singapore contributed to this story.