Updated from 11:38 a.m. EDT
Oil prices fell toward $50 a barrel Wednesday, after the Energy Department reported another larger-than-expected jump in crude inventories.
Crude stocks rose by 2.67 million barrels last week, the government said, nearly twice the expected rate. Gasoline inventories added 187,000 barrels, compared with expectations for a 900,000-barrel gain.
June crude closed down $1.62 at $50.45 a barrel on Nymex. Gasoline futures were down about 3 cent to $1.48 a gallon.
Refinery utilization was slightly up at 91.8%, the Energy Department report said, while gasoline imports were above 1 million barrels a day for the fifth straight week.
"Clearly the U.S. does not have enough refining capacity to satisfy its gasoline needs," said Jim Williams, energy economist at WTRG Economics. "Even if refineries reach 95%, which is the level I would have expected them to be at this time of year, the U.S. would still have to increase gasoline imports."
Crude inventories, currently at 329.7 million barrels, are at their highest level in three years, the report said.
"This is a bearish report, but looking at the fourth-quarter demand expectations, coupled with a very limited spare capacity from OPEC, oil prices are likely to remain in their current range," Williams said.
Elsewhere, the International Energy Agency, an energy forum for 26 industrialized countries, said in a monthly market report that oil demand growth for 2005 will decrease to 2.2% from 3.4% in 2004.
In the first quarter, demand for crude oil in China grew by only 4.5%, compared with a 19.3% growth in the same time a year ago, the private group said.
Global inventories rose in the first quarter by 240,000 barrels a day, due to increased OPEC production, extending the days of forward cover to 53, from 51 last year.
The Energy Department also published a monthly update Tuesday in which it cut its estimate of crude oil's average cost in the second quarter by $6, to $51 a barrel. It also lowered its projection for the average price of gasoline during the months of April through September to $2.17 a gallon, from $2.28.
In corporate news, Monday's $1.35 billion acquisition of the natural gas liquids business of
is getting lukewarm ratings from the analyst community. Anatol Feygin, analyst at Bank of America, said Oneok paid too much and advised clients to sell the stock. Gabe Moreen of J.P. Morgan, which rates the company a neutral, said the midstream assets that were acquired were good but "not great."
Shares of major oil producers were mixed.
( RD) decreased 0.39%; and