Oil Down With Cushing Inventory Nearly Flat

Oil prices fell on Wednesday after the government reported that stocks of crude are still running much higher than usual for this time of year.

Benchmark crude fell 34 cents to $88.16 in midday trading on the New York Mercantile Exchange.

Oil prices were higher earlier in the day. But a weekly report from the Energy Information Administration showed that inventory has barely moved at the key oil hub in Cushing, Okla. That suggests that most refiners have all the supply they need for now, driving prices lower.

Nationally, inventories fell 2.4 million barrels last week, more than the 1.25-million-barrel decline expected by analysts surveyed by Platts, the energy information arm of McGraw-Hill (NYSE: MHFI  ) . Still, inventories are well above average for this time of year, the EIA said. And inventories of gasoline and blending components both rose last week.

Gasoline prices at the pump fell slightly to a national average of $3.38 per gallon, according to AAA.

Brent crude, which is used to price international varieties of oil, fell 47 cents to $109.37 on the ICE Futures exchange in London.

In other energy futures trading on the Nymex:

• Heating oil was unchanged at $3 a gallon.
• Natural gas added 13 cents to $3.67 per 1,000 cubic feet.
• Wholesale gasoline shed 3 cent to $2.65 a gallon.