Oil near $96 as U.S. supplies rise, refineries ramp up; gasoline demand weak

NEW YORK, N.Y. – The price of oil held onto small gains Wednesday after the government reported a slight increase in U.S. crude supplies.

By early afternoon in New York, benchmark crude for June delivery was up 36 cents to US$95.98 a barrel. The contract fell 54 cents to finish at $95.62 per barrel on Tuesday.

The U.S. Energy Department said oil supplies grew last week by 200,000 barrels to 395.5 million barrels, which is 4.2 per cent above year-ago levels. Analysts were expecting an increase of 1.9 million barrels in the week ended May 3.

Busy refineries explain the smaller than expected increase. Refineries operated at 87 per cent of capacity last week, up 2.6 percentage points from the week before. Still, demand for gasoline fell 2.4 per cent over the past four weeks, and demand for distillates, such as heating oil and diesel, also fell, helping to keep oil prices in check.

Brent crude, which is the benchmark for international oil varieties, was down 49 cents to $103.91 per barrel on the ICE Futures exchange in London.

In other energy futures trading on the New York Mercantile Exchange:

— Wholesale gasoline rose one cent to $2.85 a gallon.

— Heating oil fell two cents to $2.91 a gallon.

— Natural gas added three cents to $3.95 per 1,000 cubic feet.

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Pablo Gorondi in Budapest and Pamela Sampson in Bangkok contributed to this report.

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