Updated from 10:54 a.m.Energy prices fell Wednesday after the government reported the latest in a string of big gains to U.S. crude inventories. April crude lost 17 cents to close at $62 a barrel on the Nymex. Unleaded gasoline declined less than 1 cent to $1.82 a gallon, and heating oil rose less than a penny to $1.78 a gallon. According to a weekly update from the Energy Department, crude inventories jumped 4.8 million barrels to 339.9 million barrels last week, and are now at their highest level in seven years. Helping to drive the gain was ongoing seasonal maintenance at many U.S. refiners, which use crude as their raw material. Analysts polled by Bloomberg had predicted a gain of 2.1 million barrels in the Energy Department report. The increase in oil stockpiles followed a 6.8 million-barrel addition two weeks ago. Refinery problems and maintenance shaved domestic production of distillates, which include heating oil, and gasoline. Inventories of gasoline fell 900,000 barrels to 223.9 million barrels, but are slightly above last year's level. Distillates, which include heating oil, plummeted by 3.9 million barrels to 127.5 million barrels, but still remain 13% above the same period last year. Distillates had been projected to fall by 1.3 million barrels and gasoline by 1 million barrels last week, according to Bloomberg. The supply report was outweighing geopolitical problems, which have recently exerted a bullish influence on oil prices because of their potential to worsen an already tight worldwide supply picture. Nigerian separatists vowed to increase their attacks on foreign-owned oil facilities in their continuing campaign for a greater share of the country's oil wealth. Their attacks have cut the country's daily oil production by 25% from a high of 2.2 million barrels. Nigerian crude has become increasingly important to the U.S. as it attempts to obtain oil outside of the Middle East.
The U.N. Security Council meets later this week to take up Iran's nuclear program and discuss possible punitive measures against the country. Iran recently restarted enriching uranium in defiance of Western threats of economic sanctions. The country's leadership has vowed the country would not back down. Many analysts believe the Security Council will not slap sanctions on Tehran because the world would not be able to make up for the loss in crude output. Iran is OPEC's second-largest oil producer with a daily total of 4.4 million barrels. Forecasts of colder weather and the end of the winter heating season were helping keep natural gas prices low. Futures were down 24 cents to $7.14 per million British thermal units. A warmer-than-usual winter has boosted natural gas stockpiles 22% above last year for a total of 1.8 trillion cubic feet. The Energy Department releases its natural gas supply report on Thursday at 10:30 a.m. EST and inventories likely fell by 64 billion cubic feet, according to a Bloomberg survey of analysts.