May 07, 2013 - 11:37 AM
NEW YORK, N.Y. - The price of oil fell Tuesday on expectations of another increase in U.S. oil supplies.
By early afternoon in New York, benchmark oil for June delivery was down 43 cents to US$95.73 per barrel.
The U.S. Energy Department releases its weekly report on U.S. oil inventories Wednesday. Addison Armstrong, senior director of market research at Tradition Energy, expects supplies rose by 2.8 million barrels in the week ended May 3. Oil production in the U.S. is the highest in two decades, while demand for gasoline and other fuels remains subdued.
Last week the Energy Department said supplies rose by 6.7 million barrels, contributing to a more than two per cent drop in the price of oil.
Meanwhile Saudi Arabia is apparently adding to ample global supplies. Reports say the Saudis continued to increase crude oil output in April, to around 9.3 million barrels a day. That weighed on oil prices Tuesday.
The added Saudi output "makes it more difficult to reduce the oversupply and allow the oil price to recover," said a report from Commerzbank in Frankfurt.
Brent crude, which is the benchmark for international oil varieties, was down 29 cents to $105.17 per barrel on the ICE Futures exchange in London.
In other energy futures trading on the New York Mercantile Exchange:
— Wholesale gasoline dropped two cents to $2.85 a gallon.
— Heating oil rose two cents to $2.94 a gallon.
— Natural gas fell eight cents to $3.93 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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News from © The Associated Press, 2013