Oil Drops Following Stronger Inventory Report

Oil slipped below $89 a barrel Wednesday following a report that showed diesel and gasoline inventories improved more than forecast last week, Bloomberg reported.

Crude futures fell almost $1 to $88.45 a barrel on the New York Mercantile Exchange following the Department of Energy’s weekly report showed gasoline stockpiles rose 3.3 million barrels last week.

Distillate inventories, which include diesel, gained 1.2 million barrels for the week ended Saturday, DOE said, while crude supplies fell by 4.2 million barrels.

Distillates were forecast to rise by 750,000 barrels and gasoline by 500,000 barrels, Bloomberg reported. Crude also did better than the 2-million barrel decline forecast by analysts.

Oil futures closed at $91.55 a barrel on Monday, the highest Nymex closing price since October 2008 when prices were falling from record highs over $100 a barrel.

Diesel and gasoline prices also hit their highest levels since October 2008 this week, with diesel topping $3.33 and gas over $3.07 a gallon, DOE said Monday.