NEW YORK — Crude prices spiked above $102 a barrel for the first time Wednesday, then retreated after the government reported the nation is greased with more oil and gasoline than expected.
Prices nonetheless stayed within range of Tuesday's record close as the dollar tumbled to fresh lows against the euro and U.S. economic worries drove more money into energy futures as a hedge against inflation.
"This is a market that has been trending strongly to the upside, ignoring fundamentals and focusing on other factors," said Tim Evans, an energy analyst at Citigroup Global Markets. "They are not looking at how oil supply compares with oil demand."
Light, sweet crude for April delivery fell $1.24 to settle at $99.64 on the New York Mercantile Exchange, after surging as high as $102.08 a barrel. On Tuesday, the contract jumped $1.65 to settle at a record $100.88 a barrel.
At the pump, gasoline prices added a penny overnight, rising to an average of $3.15 from $3.14, according to AAA and the Oil Price Information Service. In the Triangle, the average price was $3.18, up 19 cents in a month. At this time last year, drivers were paying $2.33 a gallon in the Triangle, and the national average was $2.37. Industry observers say prices will likely top May's peak of $3.23 as stations begin to switch to more expensive summer-grade fuel.
The report by the Energy Department's Energy Information Administration showed U.S. crude oil inventories rose by 3.2 million barrels, or 1 percent, to 308.5 million barrels. Although that number is slightly lower than levels a year ago, it is well ahead of the 2.4 million barrel gain analysts had been expecting.
It was the seventh straight week the report showed a rise in crude inventories, suggesting the U.S. at least has more than enough oil to meet demand. Data showed gasoline inventories also rose more than expected -- by 2.3 million barrels to 232.6 million barrels; analysts had expected a more modest rise of 400,000 barrels. Refinery activity also increased much more than expected.
Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill., said the report offered the market a number of bearish signals. But, he noted, traders of late have focused on other factors than just supply in deciding whether to buy or sell.
"We had somewhat of a tug-of-war going on all day long with an upward pull from the weak dollar and a downward pull from the statistics," he said. "As long as the dollar keeps making all-time lows against the euro, selling isn't going to be real aggressive."
The 15-nation euro jumped to a record $1.51 against the greenback, meaning that crude remains a relative bargain for buyers overseas. Gold -- another commodity seen as a hedge against inflation -- also struck a record high.
Oil prices are still within the range of inflation-adjusted highs set in early 1980. Depending on how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 today.
In other Nymex trading Wednesday, heating oil futures fell 4.39 cents to $2.77, while gasoline futures fell by 7.28 cents to $2.48.
Natural gas futures lost 27 cents to settle at $8.93 per 1,000 cubic feet.
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