Oil fell for a third day after government data showed U.S. inventories rose to the highest level in more than five months and on expectations that the Federal Reserve won’t take new action to bolster the economy.
Prices fell as much as 1.2% after the Energy Department said supplies rose 4.16 million barrels to 344.9 million last week. Fed Chairman Ben S. Bernanke, in prepared testimony for Congress, gave no signal that the central bank is considering more measures to spur the economy and called the inflation outlook "subdued."
Crude oil for April delivery fell $1.26, or 1.2%, to $105.29 U.S. a barrel late Wednesday morning on the New York Mercantile Exchange. Oil traded at $106.60 U.S. a barrel before release of the inventory report at 10:30 a.m.
Brent oil for April settlement dropped 47 cents, or 0.4%, to $121.08 U.S. a barrel on the London-based ICE Futures Europe exchange.
The inventory gain was almost four times the 1.1-million-barrel gain that was median estimate of analysts in a Bloomberg News survey.
Prices touched a nine-month high of $109.95 U.S. a barrel in February as the U.S. and Europe ramped up sanctions against Iran over its nuclear program.
Gasoline inventories fell 1.6 million barrels to 229.9 million last week, the Energy Department said. Stockpiles were forecast to slip 425,000 barrels. Gasoline demand dropped 3.1% to 8.36 million barrels a day.
Distillate supplies, which include heating oil and diesel, fell 2.07 million barrels to 141.4 million. Stockpiles were forecast to fall 750,000 barrels.
Oil gained earlier as the the U.S. economy expanded more than forecast in the fourth quarter. Gross domestic product climbed at a revised 3% annual rate, the most since the second quarter of 2010, the Commerce Department reported.
Economists surveyed by Bloomberg called for no change in U.S. GDP growth from the previously reported 2.8% gain. The world’s largest economy expanded at a 1.8% rate in the prior three months.
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