NEW YORK (CNN/Money) - Oil prices zigzagged Wednesday, turning lower after a government report revealed a bigger-than-expected increase in crude stockpiles but a bigger-than-expected drop in inventories of gasoline and distillates used for heating oil.

U.S. light sweet crude for May delivery closed up 38 cents to $66.45 a barrel. After the Energy Information Administration (EIA) released its report, the contract teetered down 12 cents to $65.96.

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In the previous session, crude surged by $1.91 a barrel to close at $66.07, after touching $66.20.

Crude oil inventories climbed 2.1 million barrels in the week ended March 24, versus forecasts for an increase of 950,000 barrels, according to Briefing.com. At 340.7 million barrels, U.S. crude oil inventories remain well above the upper end of the average range for this time of year, and are at the highest level since the week ended April 16, 1999.

"Inventories for crude continues to increase but I think that's bearish for crude prices," Brian Hicks, the co-fund manager of U.S. Global Investors' Global Resources Fund, told CNNMoney.com.

Total motor gasoline inventories plunged by 5.4 million barrels last week, the largest drop since the week ended Aug. 22, 2003, but they remain above the upper end of the average range. Gasoline inventories were expected to fall over 1.45 million barrels last week, according to a Briefing.com survey.

The decline in inventories suggests that the 1 million barrels of motor gasoline imported to the United States has not been able to keep up with demand, which averaged nearly 9.1 million barrels per day, or 1.3 percent above the same period last year, according to the EIA report.

News of declining gasoline stocks comes just as refineries are scheduled to undergo heavy maintenance and ahead of the summer driving season.

Distillate fuel inventories fell by 2.5 million barrels last week, but remain above the upper end of the average range for this time of year. Briefing.com said distillates were expected to decline by 1.25 million barrels.

Crude oil prices have held above $60 for more than a month as dealers have had to contend with swollen U.S. crude stocks and supply fears in producer countries Iran and Nigeria.

Violence in Nigeria has shuttered roughly 26 percent, or 630,000 barrels per day, of the country's production capacity, according to Reuters, while worries still linger whether Iran would scale back its oil exports if Western countries attempted to stifle its nuclear ambitions.

Hicks says he expects crude prices to continue to remain sensitive to situations such as Nigeria and Iran.

"It will be real dependent on the geopolitical situation," he said. "It's a situation where any potential disturbance really has an effect on the price of crude oil."

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