LONDON (AP) — Oil prices hovered above $104 a barrel Wednesday after a report showed U.S. crude supplies jumped more than expected for a fourth week, suggesting demand remains weak.
Benchmark oil for May delivery was down 10 cents to $104.10 a barrel by early afternoon European time in electronic trading on the New York Mercantile Exchange. The contract rose $1.27 to settle at $104.20 in New York on Tuesday.
Brent crude for June delivery was down 96 cents at $117.82 per barrel in London.
The American Petroleum Institute said late Tuesday that crude inventories rose 3.4 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted an increase of 400,000 barrels.
Inventories of gasoline fell 2.6 million barrels last week while distillates tumbled 2.4 million barrels, the API said.
The Energy Department's Energy Information Administration reports its weekly supply data later Wednesday.
Crude has traded above $100 most of this year as an improving U.S. economy has bolstered investor confidence. However, crude demand has remained tepid.
"We look for a sizable U.S. crude supply surplus during the coming months to take some steam out of crude strength," energy trader and consultant Ritterbusch and Associates said in a report. "We still see fresh lows to below the $100 mark by next week."
On Tuesday, President Barack Obama urged Congress to give oil market regulators more muscle to deter price manipulation by speculators amid rising gasoline prices.
Obama called on Congress to strengthen federal supervision of oil markets, increase penalties for market manipulation and empower regulators to increase the amount of money energy traders are required to put behind their transactions.
"Although President Obama's comments on oil price regulation will occupy much headline space, it shouldn't have much impact on oil pricing over the near term," Ritterbusch said.
In other energy trading, heating oil was down 2.2 cents at $3.10 per gallon and gasoline futures slid 4.8 cents at $3.19 per gallon. Natural gas fell 0.4 cents to $1.96 per 1,000 cubic feet.