Crude-oil supplies slipped 2.21 million barrels to 330.6 million in the week ended Sept. 1, the report showed. Inventories are up 5 percent from the same week a year earlier when stockpiles plunged 6.45 million barrels because of Hurricane Katrina. Inventories of gasoline, heating oil and diesel increased last week, according to the department.
``Inventories are healthy and will look even healthier in the weeks to come because of what last year's hurricanes will do to the year-on-year comparisons,'' said Peter Beutel, president of Cameron Hanover Inc., a New Canaan, Connecticut, energy consultant. ``The only thing that will keep this from happening is if we get a hurricane.''
Crude oil for October delivery fell 24 cents, or 0.4 percent, to $67.26 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures touched $66.76, the lowest since April 7.
``I've been paying attention to whether we stay below the $67.30-$67.40 level,'' said Tom Bentz, an oil broker with BNP Paribas Commodity Futures Inc. in New York. ``If oil closes below that level we could be looking at $65 or $65.50 as the next target.''
He identified that level as important because it's the 200- day moving average. Moving averages provide clues to technical traders by showing the average value of a security or commodity over a specific time period.
Surplus Inventories
Inventories of crude oil were 12 percent above the five-year average for the week, the Energy Department said. Gasoline, diesel and heating-oil inventories are also above the five-year average.
The department released its weekly report on petroleum supplies at 10:30 a.m. in Washington. The release was a day later than usual because of the Labor Day holiday on Sept. 4.
``We're in a shoulder period when there is little heating oil or gasoline demand so prices should fall unless there are headlines,'' said James Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois. ``We haven't had a significant storm this year and there are no geopolitical headlines boosting the market at the moment.''
BP Plc, the world's third-biggest oil company by market value, said production at the Greater Prudhoe Bay oil fields in Alaska totals about 250,000 barrels a day and full output might be restored by the end of October.
On Aug. 6 BP said it planned to shut 400,000 barrels of daily production at Prudhoe Bay as a precaution because of corrosion in the pipes that feed oil to the Trans Alaska Pipeline. U.S. regulators later allowed the company to keep the western side of the field open, which accounts for about half of total Prudhoe Bay production.
Brent crude oil for October settlement fell 47 cents, or 0.7 percent, to $66.46 a barrel on the London-based ICE Futures exchange. Futures touched $66.11, the lowest since April 5.
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