Oil prices fell Wednesday after the Energy Department said crude oil and gasoline stockpiles jumped much more than expected last week. Inventories of distillates, which include heating oil and diesel, fell less than forecast, according to AP. The Energy Information Administration report injected a dose of bearish sentiment into a market that has set new records in 11 of the past 12 sessions. Crude oil supplies jumped by 6.2 million barrels last week, more than three times the 1.6 million barrel increase analysts surveyed by Dow Jones Newswires were expecting. Gasoline stocks, meanwhile, rose by 1.7 million barrels last week, well above the expected 300,000 barrel increase, and distillate supplies dropped by 1.2 million barrels, less than the expected 2 million barrel decline. Light, sweet crude for April delivery fell 80 cents to $107.95 a barrel on the New York Mercantile Exchange. «This was another set of consistently bearish data,» said Tim Evans, an analyst at Citigroup Inc., in a research note. It was the eighth increase in crude supplies in nine weeks, putting oil inventories back on a growth track after a one-week decline. Many analysts argue that oil prices can't be justified by the market's underlying supply and demand fundamentals. Indeed, while oil supplies have risen 10.2 percent since early January, forecasters including the Energy Department, the International Energy Agency and OPEC have consistently reduced their demand growth predictions for this year. Wednesday's EIA report offered more evidence demand is falling: U.S. gasoline consumption fell 0.7 percent last week compared to the same week last year. Normally, gas consumption grows about 1.5 percent year-over-year, just to keep pace with population growth. «Product demand remains quite weak,» Evans said. Yet, evidence of weak demand amid growing supplies hasn't stopped oil prices from rising in the past. Many analysts believe investors are being attracted to the oil market by the weak dollar. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is weak. The dollar fell to a new low against the euro Wednesday, suggesting that crude's decline could be temporary. Other energy futures also fell Wednesday. April gasoline futures dropped 2.99 cents to $2.6962 a gallon on the Nymex, and April heating oil futures lost 3.17 cents to $2.964 a gallon. April natural gas futures fell 5.3 cents to $9.947 per 1,000 cubic feet. In London, April Brent crude futures fell 55 cents to $104.70 on the ICE Futures exchange.
