Oil prices fell below $76 a barrel Wednesday as the latest economic data showed the economy was still in low gear and demand for oil and gas was likely to remain weak.
Benchmark crude for October delivery lost $1.10 at $75.70 a barrel on the New York Mercantile Exchange. The contract lost 39 cents to settle at $76.80 on Tuesday.
Gasoline pump prices rose again. The national average for a gallon of unleaded regular is up about a cent and a half from Tuesday at $2.73. That's a nickel higher than a week ago almost 17 cents above a year ago. Rising prices in the Midwest, where repairs continue outside Chicago on an Enbridge pipeline that carries crude to refineries, again boosted the average. Drivers in Illinois pay an average of about $2.96 a gallon. The price is around $2.92 in Michigan and $2.84 in Indiana.
Once the pipeline starts operating again, pump prices should pull back.
"The latest statements from Enbridge and local officials indicate that the line will be restarted earlier than priced by the market and we will now not exclude a weekend surprise on the resumption of flows," said analyst Olivier Jakob of Petromatrix.
On Tuesday, Enbridge restarted a 91-mile pipeline that runs from Ontario, Canada, to New York that was shut down a day earlier to investigate a possible low-level leak near Buffalo, N.Y. Enbridge said it found no leak but would monitor the site.
Industrial production in the U.S. rose slightly in August, but at a slower rate than earlier this year. Also the Fed's regional index of manufacturing fell from August to September. Both point to less consumer spending and soft demand for oil and gas at the business and consumer levels.
In its weekly report on petroleum inventories, the Energy Department's Energy Information Administration said crude inventories and gasoline supplies fell last week, with oil down 2.5 million barrels and gasoline down by 700,000 barrels. Despite the decline, crude supplies are still at record highs — 7.4 percent above year-ago levels. Gasoline inventories are 8.1 percent higher than a year ago.
Platts senior oil analyst Linda Rafield noted the decline in crude stocks was the first time total petroleum inventories fell in nine weeks, with declines concentrated along the Gulf Coast and Midwest.
Japan's decision to weaken the yen by buying dollars helped push down oil prices on Wednesday. A stronger dollar makes oil and other commodities priced in dollars less appealing to foreign investors.
Analysts looking at the technical aspects of oil trading said crude's failure to break above $78 a barrel in recent days could mean further price declines.
"This can be interpreted as a signal of an imminent downward movement, which could take oil prices back toward the lower end of the multi-month trading range of $70 to $80," said a report from Commerzbank in Frankfurt.
In other Nymex trading in October contracts, heating oil added 0.35 cent to $2.1323 a gallon and gasoline fell 1.28 cents to $1.9562 a gallon. Natural gas gained 6.7 cents $4.033 per 1,000 cubic feet.
In London, Brent crude fell 18 cents to $78.98 a barrel on the ICE Futures exchange.
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Associated Press writers Pablo Gorondi in Hungary and Alex Kennedy in Singapore contributed to this report.
