Oil prices fell Wednesday as an unexpected increase in U.S. gasoline inventories and a bigger-than-expected rise in crude supplies showed that Americans are driving less. Light sweet crude oil for November delivery was down nearly $3 to below $98 a barrel in midday trading on the New York Mercantile Exchange, after earlier falling as low as $95.95. Crude prices have been volatile in recent sessions as investors wait to see if U.S. lawmakers will approve a $700 billion financial rescue plan. On Tuesday, prices rose more than $4 to above $100 a barrel, rebounding from a $10.52 plunge the previous session—the second-biggest one-day dollar decline in history. Wednesday's drop was tied to data showing higher U.S. fuel inventories. The Energy Information Administration (EIA) said crude stockpiles rose by 4.3 million barrels last week to 294.5 million barrels. Analysts had expected a smaller increase. Gasoline supplies rose by 900,000 barrels to 179.6 million barrels. Analysts had expected supplies to fall. Inventories of distillates—including diesel, heating oil, and jet fuel—fell by a more-than-expected 2.3 million barrels to 123.1 million barrels. U.S. energy demand also continued to fall, the EIA said. Gasoline demand over the past four weeks was 4.5 percent lower than a year earlier, averaging 8.9 million barrels per day. U.S. refineries ran at 72.3 percent of total capacity, a gain of 5.6 percentage points from the previous week, the EIA said.
