NEW YORK (Reuters) - Oil prices fell on Wednesday after government data showed an increase in U.S. gasoline inventories ahead of the July 4 Independence Day holiday, traditionally the peak of the summer driving season.
Gasoline stockpiles in the world’s top consumer rose by 2.3 million barrels last week, above analysts forecasts, data from the U.S. Energy Information Administration showed.
Distillate inventories, including diesel, increased by 2.9 million barrels, while crude stockpiles fell by 3.7 million barrels.
U.S. crude settled 58 cents lower at $69.31 a barrel, after rising as high as $71.85. London Brent crude fell 51 cents to settle at $68.79 a barrel.
“The fact that gasoline stocks are up 2.3 million barrels ahead of the Fourth of July weekend is huge,” Stephen Schork, editor of The Schork Report, said, adding “Demand is low.”
The economic crisis has battered fuel demand, sending crude off record highs above $147 a barrel hit last July. But optimism that a potential economic recovery could push demand higher has helped lift crude off lows below $33 a barrel touched in December.
Total U.S. product demand fell 5.8 percent over the four weeks to June 26, compared with year-ago levels, according to the EIA report.
The stock builds outweighed optimism in equities markets, with U.S. stocks rising on improving prospects for manufacturing around the world and suggestions the global economy was recovering.
Further pressure on crude came after a Reuters survey showed OPEC output rose in June, with members’ compliance with agreed cuts at 72 percent last month, a fall from 75 percent in May.
The Organization of the Petroleum Exporting Countries agreed last year to a series of output cuts aimed at taking 4.2 million barrels per day of crude off the market to help stem the slide in crude prices.
Kuwait’s oil minister said OPEC was unlikely to raise output when it meets again in September, if markets remain oversupplied.
Output from OPEC member Nigeria has dropped over the past month due to an escalation of civil unrest in its oil-rich Niger Delta region. On Tuesday, Royal Dutch Shell (RDSa.L) said attacks by Nigerian militants had cut its onshore output to around half of what it was producing earlier this year.
Reporting by Matthew Robinson, Gene Ramos, and Robert Gibbons in New York, Emma Farge and Ikuko Kao in London and Fayen Wong in Perth; Editing by Walter Bagley