Gasoline futures tumbled 6 percent Wednesday after the government reported that the U.S. unexpectedly increased supplies last week.
Analysts expected gasoline supplies to shrink for the 12th week in a row as a rash of operating problems during the past few months idled numerous refineries around the country. Energy Information Administration data showed that supplies increased last week by 1.3 million barrels, growing as gasoline demand dropped for the seventh week in a row to 9 million barrels per day.
Gasoline for June delivery dropped after the report, losing 22 cents at $3.1588 per gallon on the New York Mercantile Exchange. Gas supplies typically decline in the spring as refineries purge their stocks of winter fuels. This year supplies fell more than expected as fires, power outages and other random problems temporarily knocked refineries out of commission during the past few months. Mississippi River flooding also may affect some refineries, analysts said.
Retail gasoline prices increased as supplies dropped during the past several weeks, flirting with a national average of $4 per gallon last week. Pump prices increased overnight for the first time in six days to $3.962 per gallon. A gallon of regular is 19.2 cents more expensive than a month ago and $1.061 higher than the same time last year.
The government also said oil supplies grew last week by 3.8 million barrels, more than twice as much as what analysts expected. Benchmark crude dropped $2.95, nearly 3 percent, to $100.93 per barrel on the Nymex. In London, Brent crude lost $2.74, more than 2 percent, to $114.89 per barrel on the ICE Futures exchange.
In other Nymex trading for June contracts, heating oil lost 5.23 cents to $2.9489 per gallon and natural gas lost 7.6 cents to $4.227 per 1,000 cubic feet.
Chris Kahn can be reached at http://twitter.com/ChrisKahnAP