Oil prices fall as U.S. supplies unexpectedly grow
Benchmark U.S. crude fell by $1.63 to $82.40 per barrel at midday on the New York Mercantile Exchange.
By CHRIS KAHN
The Associated Press
NEW YORK — The price of oil dropped Wednesday after the government said U.S. supplies unexpectedly grew last week.
Benchmark U.S. crude fell by $1.63 to $82.40 per barrel at midday on the New York Mercantile Exchange. Brent crude, which is used to price much of the oil imported into the U.S., lost $1.12 to $94.64 per barrel in London.
The Energy Information Administration reported that oil supplies grew by 2.9 million barrels last week. Analysts were predicting that supplies would fall by 600,000 barrels. Oil supplies have risen this year to the highest levels since 1990, thanks to a boom in North American production.
"The U.S. is flush with oil right now," independent analyst and trader Stephen Schork said. "And if you factor in the economic mess in Europe, slower economic growth in China, and probably overproduction from the Saudis in preparation for the Iranian oil embargo, the world has a comfortable supply" of oil.
Schork and other analysts are expecting oil prices to fluctuate greatly in the afternoon after the Federal Reserve announces whether it will take action to stimulate the U.S. economy.
In other futures trading, heating oil lost 1.6 cents to $2.6191 per gallon while wholesale gasoline lost 2.02 cents to $2.6213 per gallon. Natural gas lost 1.1 cents to $2.534 per 1,000 cubic feet.
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