Oil moves off highs as gas supplies rise
Inventory report shows gains in refined products, higher refinery usage and record gasoline imports; OPEC hints at more supplies.
NEW YORK (CNNMoney.com) -- Oil prices slipped from earlier highs Wednesday after the government said supplies of crude oil fell slightly less than expected while refined products grew more than thought.
U.S. light crude for September delivery rose 22 cents to $73.78 a barrel on the New York Mercantile Exchange. Oil had traded up 52 cents just prior to the report's release.
In its weekly inventory report, the Energy Information Administration said crude stocks fell by 1.1 million barrels, slightly less than the 1.2 million decline forecast by analysts in a Reuters poll.
Supplies of refined products rose more than expected.
Distillates, used to make heating oil and diesel fuel, rose by 1.5 million barrels while gasoline supplies gained by 800,000 barrels. Analysts were looking for a 800,000 barrel gain in distillates supplies and a 400,000 barrel increase in gasoline stockpiles.
Refineries expanded production to run at 91.7 percent capacity, in-line with estimates.
Gasoline was also imported at the highest weekly average ever, although overall gasoline inventories still remain below average, the report said.
Also contributing to oil's decline were expectations that crude supplies from OPEC were rising, according to a Reuters report.
Oil consultant Petrologistics, which tracks tanker shipments, said overall OPEC output was set to rise 300,000 barrels per day to 30.7 million bpd this month, as producers took advantage of near record crude oil prices.
OPEC's second-biggest producer Iran said Tuesday the exporter group, which agreed to cut output last year as prices were sliding, would ramp up output if necessary.
This follows similar remarks from OPEC President Mohammed al-Hamli, who said Sunday the organization was worried high oil prices might hurt the world economy.
Production from non-OPEC Russia will remain steady until 2020, its Economy Ministry said Tuesday, broadly confirming the outlook by the International Energy Agency.
The ministry said in its long-term economic outlook that it expected production from Russia, the world's second-largest oil exporter after Saudi Arabia, to level off at 10.6 million barrels per day between 2015 and 2020.
Crude prices are now nearing their record trading high of $78.40 set last July, pushed up by stronger demand from refineries, the collapse of a peace deal in Nigeria and reports of a tightening supply and demand picture.
Gasoline prices, meanwhile, have fallen in recent weeks as supplies recovered and it becomes increasing likely the United States will get through the summer driving season without a shortage.