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Unexpectedly large increase in US crude supplies pushes oil price down more than 3 percent
NEW YORK (AP) ' Oil prices dropped more than 3 percent Wednesday after the government said U.S. supplies grew much more than expected.
The price of benchmark crude fell $2.97, or 3.2 percent, to end the day at $90.20 per barrel in New York. Brent crude fell $2.01 to finish at $108.91 in London.
The Department of Energy reported an increase of 4.7 million barrels in the nation's storage tanks last week. Analysts expected supplies to grow by only 200,000 barrels, according to Platts, the energy-information arm of McGraw-Hill Cos.
For most of the year oil supplies fell in the U.S., as drivers and businesses burned less fuel and refineries cut their inventories to save money. Imports increased last week and boosted supplies, as many refineries finished their seasonal maintenance and kicked into higher gear. Refineries operated at nearly 85 percent capacity last week, up almost 2 percentage points in a week.
The increased activity doesn't mean the U.S. is consuming more fuel. Oil and gasoline demand is still down when compared with a year ago, the government said.
Meanwhile gasoline pump prices fell less than a penny on Wednesday to a national average of $3.441 per gallon, according to AAA, Wright Express and Oil Price Information Service.
In other energy trading, heating oil fell 3.02 cents to finish at $3.0210 per gallon and gasoline futures lost 4.94 cents to end at $2.6253 per gallon. Natural gas fell 6.8 cents to finish at $3.590 per 1,000 cubic feet.