Oil Recoups Early Losses; Pump Price Up to $3.55

NEW YORK (AP) -- The price of oil recouped steep morning losses after a government report showed U.S. crude supplies grew a bit less than expected last week.

Meanwhile, U.S. drivers continue to pay more at the pump. The average price for a gallon of gas in California is now within a nickel of $4.

Benchmark crude for March delivery rose 10 cents to $96.74 a barrel on the New York Mercantile Exchange in morning trading Wednesday. It dropped as low as $95.04 earlier.

Crude supplies grew by 2.6 million barrels, or 0.7 percent, in the week ended Feb. 1. Total supplies stand at 371.7 million barrels, which is 9.6 percent above year-ago levels, the Energy Department's Energy Information Administration said in its weekly report. Analysts expected an increase of 3 million barrels.

The government also said that demand for gasoline rose nearly 5 percent over the past four weeks.

Gasoline is getting more expensive by the day. The nationwide average price for a gallon of gas rose for the 20th straight day to $3.55, a level not seen since late October. It's jumped 18 cents in just eight days; gas now costs 7 cents more than it did a year ago.

Californians are feeling the biggest pinch. The average price has gone from $3.61 a gallon to $3.96 in just a month. In New York, the average price has jumped 14 cents in the past week to $3.90 a gallon.

A number of factors are at play: Higher crude oil prices, slowing output at refineries that are undergoing maintenance, and low supplies of gasoline.

Oil sold off earlier Wednesday after data released by the American Petroleum Institute, a trade group for the oil and gas industry, showed that U.S. stockpiles of crude rose by 3.6 million barrels last week. The API report is based on voluntary submissions from refineries, storage terminals, and pipeline operators. Weekly updates to the government are mandatory.

A stronger dollar also weighed on oil prices by making crude more expensive for traders using other currencies. On Wednesday, the euro was down to $1.3529 from $1.3582 late Tuesday in New York.

In London, Brent crude rose 11 cents to $116.63 a barrel on the ICE Futures exchange.

In other energy futures trading on Nymex:

  • Wholesale gasoline fell 1 cent to $3.03 a gallon.
  • Natural gas added 5 cents to $3.45 per 1,000 cubic feet.
  • Heating oil declined 1 cent to $3.18 a gallon.

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