Oil sinks on surprise build in supplies

Backs away from record prices as crude inventories swell by 1.7 million barrels, gasoline adds 2.1 million barrels.

NEW YORK (CNNMoney.com) – Oil prices fell Wednesday after a government report said gas and oil inventories rose unexpectedly.

U.S. light crude for June delivery fell $1.01 to 73.60 a barrel on the New York Mercantile Exchange. Crude was trading down 16 cents just prior to the report, within striking distance of its all time trading high of $75.35 set April 21.

In its weekly stockpile report, the Energy Information Administration said crude supplies rose by 1.7 million barrels, while closely watched gasoline inventories swelled by 2.1 million barrels. Analysts were looking for a 100,000 barrel decline in crude and a 700,000 barrel drop in gasoline supplies, according to Reuters.

Distillates, which are used to make diesel and heating fuel, fell by 1.1 million barrels. Analysts were looking for a 100,000 barrel decline.

“This isn’t unusual for this time of year,” said Brian Hicks, co-manager of the Global Resources Fund at U.S. Global Investors, speaking of the build in gasoline stocks. “But given the recent declines we’ve seen, it was a bit bearish.”

CNN Money