Oil prices dip to US$71.43 as U.S. reports rise in crude supplies

The price of oil fell again Wednesday with new government data showing that U.S. crude supplies increased last week, a sign that demand remains weak.

HOUSTON — The price of oil fell again Wednesday with new government data showing that U.S. crude supplies increased last week, a sign that demand remains weak.

Benchmark crude for October delivery slipped 62 cents to settle at US$71.43 a barrel in trading on the New York Mercantile Exchange. In London, Brent crude fell 17 cents to settle at $71.65.

The U.S. Energy Department reported Wednesday that U.S. crude stockpiles rose by 200,000 barrels for the week ending Aug. 21. The same report a week ago showed a large and unexpected draw on oil, which sent prices soaring.

The price for a barrel of oil briefly touched $75 on Tuesday before falling three per cent for the day — a common occurrence in the volatile energy markets of late.

“Yesterday’s surprising sell-off could end up being a one-time curiosity or the start of a rejection of prices that most analysts feel are far too high, given existing supply and demand factors,” the energy consultancy Cameron Hanover said in a note to clients Wednesday.

For consumers, it may be anyone’s guess where gasoline prices are going to go heading into next year, but heating bills for those who use natural gas could be a bargain. Natural gas futures continue to trade near seven year lows.

Motorists are still enjoying gasoline that is closer to prices from 2005 than what they were paying last summer.

At the pump, retail gas prices in the United States changed little overnight, falling less than a penny to a new national average of $2.622 a gallon or the equivalent of about 69.4 cents per litre. A gallon of regular unleaded is 12.2 cents more expensive than it was a month ago, but it’s $1.05 cheaper than last year.

The government also said Wednesday that U.S. gasoline stockpiles fell by 1.7 million barrels last week.

In Canada, the price of gas at the pump averaged C$1.025 per litre, up from 97.9 cents per litre a month ago, but down from $1.299 a year ago, according to price-watching website GasBuddy.com.