Oil Report: Inventories Fall 3.9 Million Barrels

Oil prices slumped earlier today, though an Energy Department report released this morning said that U.S. crude inventories dropped by 3.9 million barrels last week. Analysts surveyed by Platts had expected only a 1.7 million barrel decline.

Reserves fell to 357.7 million barrels, or 1.1%, for the week ended June 12.

Light, sweet crude for July delivery was down 12 cents to $70.35 in the afternoon on the New York Mercantile Exchange, though earlier in the day crude prices slipped into the $69 area.

Still, most chatter today centered on other news from the U.S. Energy Information Administration report saying that gasoline reserves swelled 1.7%.

The Amex Oil Index(XOI Quote) was down 1.8% by the afternoon, while the Philadelphia Oil Service Index(OSX Quote) was off 2.8%.

Shares of Exxon Mobil(XOM Quote) were changing hands in negative territory by the afternoon, off 50 cents at $71.13.

Sunoco(SUN Quote) and Murphy Oil(MUR Quote) also joined Exxon Mobil in the red, down 3.3% and 2.2% respectively.