Oil prices fall as supplies rise

Oil prices hovered around $92 per barrel Wednesday after the government reported a bigger-than-expected increase in US crude supplies. Extra gasoline in storage projected lower demand, pushing oil prices down.?

By Joshua Freed,?AP Business writer / October 17, 2012

In this Tuesday, Oct. 9 file photo, a Chevron station posts gasoline prices starting at $5.50 per gallon in downtown Los Angeles. Oil prices fell Wednesday due to a high US supply level.

Redd Saxon/AP/File

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Oil prices?gave up early gains and hovered around $92 per barrel on Wednesday after the government reported a bigger-than-expected increase in U.S. crude supplies.

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Supplies rose by 2.9 million barrels last week. That was almost double what analysts had forecast, according to Platts, the energy information arm of McGraw-Hill Cos.

Gasoline supplies also rose. Analysts had predicted a decline.

The extra gasoline and?oil?in storage tends to push?prices?down, because it suggests that there's enough to go around, or that demand is low.

In midday trading on Wednesday,?oil?was down 7 cents to $92.02 per barrel on the New York Mercantile Exchange.

Oil?had been trading above $92 per barrel earlier in morning, as European stocks had a positive day, and hopes grew that Spain might be on the verge of requesting a bailout.

Gasoline?prices?at the pump fell almost 2 cents, to $3.756 per gallon, according to AAA.

The waffling?oil?prices?matched stock indexes that are also mixed in midday trading. Technology giants IBM and Intel both said customers are holding back. Economic weakness generally means less demand for?oil, pushing?prices?down.

Brent crude, which is used to?price?international varieties of?oil, fell 80 cents to $113.20 a barrel on the ICE Futures exchange in London.

In other energy futures trading on the Nymex:

? Heating?oil?fell 2 cent to $3.17 per gallon.

? Natural gas gained 5 cent to $3.48 per 1,000 cubic feet.

? Wholesale gasoline fell 6 cents to $2.79 per gallon.

Source: http://rss.csmonitor.com/~r/feeds/csm/~3/DQnYkeBSEdU/Oil-prices-fall-as-supplies-rise

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