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Energy prices slide on surprise jump in gas supply

Energy prices slide on surprise jump in gas supply

Energy prices, including crude oil futures, slumped Wednesday after the Energy Department reported a higher than expected jump in U.S. gasoline stockpiles.
At midday, benchmark crude for December delivery fell $1.76 to $77.79 a barrel on the New York Mercantile Exchange.
Retail gasoline prices have ticked upward since the middle of the month, around the same time that crude futures rose above $75 per barrel for the first time this year.
The rising cost of crude and ensuing production cuts by U.S. refiners who are also stung by those prices has helped push gasoline prices higher for 15 days in a row.
The report by the Energy Information Administration Wednesday seemed to wash away fears of tightening supply, at least for now.
Gasoline stocks rose by nearly 2 million barrels though many energy analysts had expected supplies to fall for a third week in a row.
Gasoline futures on the New York Mercantile Exchange fell 3 percent almost immediately.
U.S. refiners are buying less crude to make fuel because demand from airlines, trucking companies and motorists remains relatively week.
Diesel and jet fuel demand are both down over the past four weeks compared with last year, the government reported Wednesday.
Unable to pass off cost increase for the crude they must buy, refiners have shut down operations and production is currently at levels more common in the aftermath of a hurricane.
Even with energy demand low, the falling value of the dollar is driving crude futures higher. When the dollar falls, investors holding euros or other relatively strong currencies can buy more crude because it's bought and sold in dollars.
The dollar gained strength on Wednesday, and crude prices fell.
"Even with supply underlying the market, the current interest for energy swirls around the economy and the dollar," said PFGBest analyst Phil Flynn.
In other Nymex trading, heating oil fell 4.5 cents to $2.01 a gallon. Gasoline for November delivery dropped 6.7 cents to $2 a gallon. Natural gas for November delivery fell 20 cents to $4.357per 1,000 cubic feet.
In London, Brent crude for December delivery fell $1.70 to $76.22 on the ICE Futures exchange.
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Associated Press Writers Alex Kennedy in Singapore and Pablo Gorondi in Budapest, Hungary, contributed to this report.


Updated : 2021-05-08 15:39 GMT+08:00