NEW YORK (CNN/Money) - The overall supply of crude oil in the United States rose by 4 million barrels, the government reported Wednesday, overshadowing a sharper-than-expected decline in the inventory of distillate fuel, used in heating oil.
Oil prices tumbled following the EIA release, with the December light crude contract falling more than a dollar on the New York Mercantile Exchange, trading below $55.
Crude oil inventory climbed to 283.4 million barrels from 279.4 million barrels the previous week, which was a 1.2 million barrel increase from the week before, according to the Energy Information Administration (EIA).
Analysts surveyed by Briefing.com had estimated crude oil supplies would rise 800,000 barrels.
The stockpile of distillate fuel, which is used for heating oil, fell 2.4 million barrels to 116.6 million barrels in the week ended Oct. 22, from 119 million barrels in the previous week, the EIA reported.
Analysts surveyed by Briefing.com predicted distillate stocks, which dropped 1.9 million barrels the week before, would fall 750,000 barrels.
Of that figure, heating oil stocks alone dropped 600,000 barrels to 48.9 million, dragging inventories some 15 percent below last year, said the release.
"The build up in crude could indicate the fall in distillate fuel has finally bottomed out," said Phil Flynn, an analyst at Alaron Trading.
"We're seeing crude build up in the U.S. thanks to imports, rather than having to get help from our strategic petroleum reserves, and that's very encouraging," said Flynn.
The EIA also said that gasoline inventories rose 1.3 million barrels, far better than the 675,000 barrel decline forecast by analysts.
The report said crude oil refinery inputs averaged nearly 14.9 million barrels per day during the week ending Oct. 22, up 100,000 barrels per day from the previous week's average, and as a result, motor gasoline production increased compared to the previous week, averaging 8.9 million barrels per day.