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Oil price drops below $103 a barrel after government reports unexpected supply increase
NEW YORK (AP) ' Oil prices slipped Thursday after the government reported an unexpected increase in crude supplies and a 7 percent drop in petroleum demand. Natural gas prices also dropped as supplies remained well above the 5-year average.
In midday trading benchmark crude fell 41 cents to $102.81 per barrel in New York. Brent crude, which is used to price foreign oil varieties that are imported by U.S. refineries, rose 20 cents to $113.90 per barrel in London.
Prices dipped after government reports showed only tepid petroleum demand from consumers in recent weeks. The Energy Information Administration data came the same day as rosier economic readings showing fewer jobless claims and layoffs, strong retail sales and expansion in the service industry.
Petroleum demand has been sliding in the U.S. as drivers cut back on gasoline purchases. Gasoline consumption has dropped for months as retail prices rose. Pump prices rose 3 cents on Thursday to a national average of $3.32 per gallon, the highest ever for this time of year.
The EIA said that oil supplies grew by 2.2 million barrels last week. Analysts expected them to shrink by 450,000 barrels, according to a survey by Platts, the energy-information arm of McGraw-Hill Cos.
Natural gas supplies shrank by 76 billion cubic feet last week, but the overall supply remains more than 15 percent above the five-year average for this time of year. Natural gas prices tumbled after the EIA released its supply report, down 13 cents, or 4 percent, to $2.97 per 1,000 cubic feet.
In other energy trading, heating oil lost 1 cent at $3.08 per gallon and gasoline futures fell about a cent to $2.77 per gallon.