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Oil drops below $88 in Europe after report shows US crude supplies jumped unexpectedly
LONDON (AP) ' Oil prices slipped below $88 a barrel on Wednesday after a report showed U.S. crude supplies unexpectedly jumped last week, a sign demand may be weakening.
Benchmark oil for October delivery fell $1.16 to $87.74 by early afternoon European time in electronic trading on the New York Mercantile Exchange. Crude rose $1.63 to settle at $88.90 on Tuesday.
In London, Brent crude for October delivery was down 35 cents at $113.67 on the ICE Futures exchange.
The American Petroleum Institute said late Tuesday that crude inventories rose 5.1 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted a drop of 1.2 million barrels.
Inventories of gasoline dropped 3.1 million barrels last week while distillates increased 276,000 barrels, the API said.
The Energy Department's Energy Information Administration reports its weekly supply data later Wednesday.
Signs of waning consumer sentiment also weighed on crude. The Conference Board said Tuesday that its consumer confidence index sank more than expected in August from July, dropping to the lowest since April 2009.
"The latest readings on consumer behavior underscore the notion that the economy still has an awfully long way to go," energy trader and consultant The Schork Group said in a report.
In other Nymex trading for October contracts, heating oil fell 1.1 cents to $3.07 per gallon and gasoline futures slipped 0.4 cents to $2.84 per gallon. Natural gas for October delivery gained 0.1 of a cent to $3.91 per 1,000 cubic feet.