Oil closes lower after gasoline supplies jump

NEW YORK (CNNMoney.com) -- Oil prices dipped nearly $1 on Wednesday after the government said supplies of gasoline and crude oil jumped more than traders had expected.

U.S. light crude for June delivery settled down 62 cents to $62.55 after dipping 97 cents on the New York Mercantile Exchange after the government inventory report. Oil had traded down 74 cents just prior to the report's release.

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In its weekly report, the Energy Information Administration said gasoline stockpiles climbed 1.7 million barrels last week, topping analysts' forecasts for a rise of about 1.1 million barrels.

Crude supplies jumped 1 million barrels, more than the 100,000-barrel gain that analysts expected, according to Reuters. Distillates, used to make heating oil and diesel fuel, increased by 1 million barrels, below analysts' expectations of a 1.4-million increase.

Refineries, closely watched due to their abnormally low rates of operation, ran at 89.5 percent capacity last week, up from 89 percent the week prior, EIA said. Analysts were looking for a bigger increase.

Refineries have suffered a series of operational setbacks over the last several months, contributing to extremely low gasoline supplies just as the nation enters the peak summer driving season.

Oil prices have rebounded from around $50 a barrel in mid-January due to OPEC supply cuts, militant attacks on pipelines in Nigeria and U.S. gasoline stocks reaching a 16-year low.

According to Reuters, some analysts think prices could be headed back to $70 a barrel, bringing prices closer to last year's record high of $78.40 a barrel, unadjusted for inflation.

"I think the gasoline scare will fade off a bit but the concern will shift to the crude market because of tightening [supplies]," said Antoine Halff, a New York-based energy analyst at the brokerage Fimat. "The underlying issue is the tightness in refineries but I don't think there's any reason that it will get worse."

Although U.S. crude prices have fallen, shares prices for big oil companies like Exxon Mobil (up $0.25 to $81.38, Charts, Fortune 500), BP (up $0.30 to $66.41, Charts), Chevron (up $0.58 to $80.73, Charts, Fortune 500), ConocoPhillips (up $0.92 to $71.64, Charts, Fortune 500) and Royal Dutch Shell (up $0.29 to $70.53, Charts) have risen.