INSTANT VIEW: U.S. crude, gasoline inventories up sharply

NEW YORK (Reuters) - U.S. crude and gasoline inventories showed a higher-than-expected increase in the week to October 3, according to weekly data from the U.S. Energy Information Administration released on Wednesday.

Distillate stocks fell close to expectations. U.S. crude oil prices tumbled after the release of the data.

HIGHLIGHTS FROM EIA REPORT (In million barrels):

- Crude +8.1 (forecast +2.3)

- Distillate -0.5 (forecast -0.4)

- Gasoline +7.2 (forecast +1.1)

ANALYST COMMENTS

TIM EVANS, ENERGY ANALYST FOR CITI FUTURES PERSPECTIVE

"The big builds in crude and gasoline were the big surprises in this week's data set, but the draw in distillate stocks was smaller than expected as well."

PHIL FLYNN, ANALYST, ALARON TRADING, CHICAGO:

"Obviously, that's a big crude build. A lot of people were hoping the refineries would be further along as far as the runs, so people are a little disappointed there. I knew the imports would be big, since this is all the back logged supplies we lost over the last few weeks due to Ike coming in a big way."

"Obviously this is bearish, and right now we're in a balancing act - should we focus on the tight supplies of product or should we focus on the macro economics slowing demand. I think we're going to continue to go back and forth with that."

"Already the rate cut and the stock market seem to be overshadowing everything. We definitely sold off after these numbers came out, and now the inventories numbers are old news and we're going to focus again on what the stock market does for the rest of the day."

"Big picture, are we concerned about the tight supply? We're nervous because we can't afford any other major disruptions either weather-wise or geopolitically, but on the other hand from the demand side of the equation it's still pretty pathetic across the board.

Some of these demand numbers are storm-related and the rebounding taking longer than thought, but a lot of it is just good old fashioned demand destruction and people and businesses reacting to these high prices and the credit crisis."

JIM RITTERBUSCH, PRESIDENT, RITTERBUSCH & ASSOCIATES, GALENA, ILLINOIS