NEW YORK (CNNMoney.com) -- Oil and gasoline prices swung widely Wednesday after the government said gasoline imports ran at the third-highest level ever, but crude supplies fell and refinery usage remained flat.
U.S. crude for July delivery settled up 52 cents at $64.01 a barrel on the New York Mercantile Exchange. But at one point during the session crude traded $1.56 lower.
Oil prices turned higher following the report's release at 10:30 am ET on falling crude stocks and no increase in refinery activity but pulled back after traders shifted focus.
"The numbers initially looked somewhat bullish," Aaron Kildow, a broker at Prudential Bache Commodities in New York, said at one point during the session when prices were lower. "But it looks like a lot of gasoline is starting to build up in the Gulf Coast, and the market is getting a little concerned as to where they are going to put it."
Kildow said there was no space left to ship inventories on a major pipeline that runs from the Gulf Coast to the Northeast.
Reports also said another pipeline was closed for maintenance, leaving gasoline stocks to build in the South.
In its weekly inventory report, the Energy Information Administration said crude supplies fell by 2 million barrels. Analysts were looking for a gain of 700,000 barrels, according to Reuters.
Refineries ran at 91.1 percent capacity, unchanged from last week and missing the 0.6 percent increase analysts had expected.
Gasoline supplies, closely watched as the summer driving season gets under way and running low all year, rose by 1.3 million barrels, in line with estimates.
EIA said national gasoline stockpiles remain well below average for this time of year, while crude and distillate supplies are above average.
But gasoline imports surged to their third-highest level ever, averaging 1.6 million barrels per day last week, EIA said.
July reformulated gasoline futures ended up about 2.5 cents a gallon at $2.207 on NYMEX. At one point gasoline futures traded 7.2 cents a gallon lower.
Distillates, used to make heating oil and diesel fuel, rose by 100,000 barrels. Analysts were looking for a gain of 700,000 barrels.
A spate of refinery problems has led to low gasoline stocks this year, helping push retail gas prices to all-time highs, even adjusted for inflation.
But over the past week prices have cooled a bit as refineries have run at greater capacity and gas supplies have begun to increase.
The average price for a gallon of regular is now $3.191, down from a record high of $3.227 hit last week, according to the motorist organization AAA.
Crude prices have also fallen over the past few days as the United States and Iran engage in high-level diplomatic talks and oil traders keep an eye on China, where the main stock market fell more than 6 percent Wednesday after the government raised investment taxes.
But on the bullish side, June marks the start of the Atlantic hurricane season that poses a threat to Gulf of Mexico oil production and refining operations.
The U.S. government's top climate agency expects up to 10 Atlantic basin hurricanes, of which three to five could be major ones.
Tropical Storm Barbara may reach hurricane strength within four days, the U.S. National Hurricane Center said.
"While it will make a nice headline it is on the wrong side of Mexico to cause any threat to oil installations," Olivier Jakob, an analyst at Swiss-based Petromatrix, told Reuters.
--from staff and wire reports 
