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Oil prices flat as driving season closes out

OIL prices didn't budge yesterday despite an Energy Department report showing a drop in crude and gasoline supplies.

Benchmark crude for October delivery closed where it began at US$68.05 a barrel on the New York Mercantile Exchange. The contract lost US$1.91 on Tuesday.

Gasoline inventories fell by 3 million barrels to 205.1 million barrels, the Energy Department said, a steeper decline than analysts had expected.

Oil analyst and trader Stephen Schork had expected a large gasoline draw given the lateness of this year's Labor Day holiday.

Gasoline supplies have increased by 2 percent since May, while a typical driving season at this point would show a draw of around of 4.6 percent.

"A build in gasoline supplies through the summer driving season has only occurred once (2004) over the last 20 years for which the DOE provides data," Schork wrote in his morning report.

Oil had been trading higher overnight after the American Petroleum Institute said late Tuesday that U.S. inventories fell by 3.2 million barrels last week. Refiners voluntarily report the API numbers, while the Energy Department reports mandatory supply figures.

But crude prices slipped just ahead of the Energy Department report, as new figures from the Labor Department showed companies earlier this year slashed spending on everything, including energy. The morning crude inventories report boosted prices above US$68, but the rally couldn't hold.

In other Nymex trading, gasoline for October delivery gained 2.64 cents to settle tat US$1.8086 a gallon and heating oil lost less than a penny to settle at US$1.7505 a gallon. Natural gas fell 10.6 cents to settle at US$2.715 per 1,000 cubic feet.

In London, Brent crude fell 7 cents to settle at US$67.66.


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