By PABLO GORONDI
The price of oil fell closer to $96 a barrel on Thursday after reports showed supplies of U.S. crude rose last week and inflation accelerated in China.
By early afternoon in Europe, benchmark oil for June delivery was down 49 cents to $96.13 a barrel in electronic trading on the New York Mercantile Exchange. On Wednesday, the Nymex contract rose $1 to finish at $96.62 a barrel.
Prices were soft after two reports released this week on oil inventories reminded traders that supplies are ample.The American Petroleum Institute said crude supplies increased by 680,000 barrels to 389.1 million barrels. Separately, the U.S. Energy Department said in its report, the market benchmark, that oil supplies grew last week by 200,000 barrels to 395.5 million barrels. Although the increase undershot expectations, analysts said the steady increase in supplies showed market fundamentals do not favor an extended rally in crude. Oil prices were also held back by higher-than-expected inflation figures out of China, which fed concerns that rising prices could slow the world's second-largest oil consumer. Consumer prices rose by an annual 2.4 percent in April, up from 2.1 percent in March, outpacing forecasts expecting an increase of 2.2 percent. Markets are awaiting the release of data later Thursday from the U.S. Labor Department on the number of Americans who applied for unemployment benefits last week, a key measure of the health of the economy. Brent crude, which is a benchmark for many international oil varieties, was down 54 cents to $103.80 per barrel on the ICE Futures exchange in London. In other energy futures trading on Nymex: â¿¿ Wholesale gasoline fell 1.52 cents to $2.8386 a gallon. â¿¿ Heating oil retreated 0.34 cent to $2.9113 a gallon. â¿¿ Natural gas lost 3.5 cents to $3.943 per 1,000 cubic feet. ___ Pamela Sampson in Bangkok contributed to this report.