Oil Prices Slip as Supplies Grow

Source:

"The government said stockpiles of oil and gasoline grew last week."

Oil prices slid Wednesday after the government said stockpiles of oil and gasoline grew last week, even though a major pipeline serving Midwest refineries was shut because of a leak.

Benchmark crude for November delivery lost 26 cents to settle at $74.71 a barrel on the New York Mercantile Exchange.

Meanwhile, gasoline pump prices continued to fall. The national average for a gallon of unleaded regular was $2.72, which was 1.1 cents lower than a week ago, according to AAA, Wright Express and the Oil Price Information Service. The price is 17.6 cents more than a year ago.

The Energy Department's Energy Information Administration said commercial crude inventories increased by 1 million barrels to 358.3 million barrels for the week ending Sept. 17. Analysts expected a drop of 1.5 million barrels, according to Platts, the energy information arm of McGraw-Hill. Platts senior oil analyst Linda Rafield said the increase came from more crude imports. She also pointed out that crude inventories are building as refineries slow down for seasonal maintenance and use less petroleum.

Gasoline supplies rose by 1.6 million barrels to 226.1 million barrels. Gasoline demand over the four weeks ended Sept. 17 averaged 9.1 million barrels a day, down 0.1% from the same period of 2009. Demand fell from the previous week by 172,000 barrels a day to 8.8 million barrels a day. That's a six-month low that Rafield says is "a sign that the consumer is curtailing discretionary spending."

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