NEW YORK — Oil prices dropped just below $77 a barrel today after the government said crude supplies rose unexpectedly last week.
Benchmark crude fell 51 cents to settle at $76.99 a barrel on the New York Mercantile Exchange.
Crude supplies grew by 7.3 million barrels last week, according to the Energy Department’s Energy Information Administration. Analysts expected a drop of 2.3 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos. Supplies of gasoline and distillates, which include diesel and heating oil, also rose.
“We know that due to disruptions from (Tropical Storm) Bonnie, refinery operations and deliveries were adversely affected in the reference week,” said oil analyst Stephen Schork. “Thus demand for crude oil may have been artificially curtailed, and could bounce back next week.”
Average gasoline pump prices across the country rose 0.3 cent from Tuesday, to $2.745 a gallon, according to AAA, Wright Express and Oil Price Information Service. That’s 3.3 cents higher than a week ago and 24 cents above a year ago.
In Houston today, drivers paid an average of $2.541 a gallon, up from $2.534 Tuesday.
Oil has stayed within the $70s for most of this year, with doubts about the strength of the U.S. economic recovery helping to undermine any move above $80.
“With the price near $80, there would have to be some extreme bullishness to witness a break to the upside,” Sander Capital said in a report. “The price of oil should stay in the $75 range for now.”
Weak durable goods orders in June pushed down stock prices. The Dow Jones Industrial Average was about 20 points lower in midday trading. The NASDAQ and the S&P 500 were down slightly as well. Oil traders watch the stock market as an indicator of the broader economy and potential for rising oil and gas demand.
Natural gas prices climbed with forecasts for more hot weather across much of the country. Natural gas fires a number of power plants that produce electricity to run air conditioners and refrigeration.
“Temperature projections returned to hotter, more humid readings into the first 10 days of August,” said energy consultants Cameron Hanover. “Readings are still very hot across large tracts of the country.”
Natural gas rose 9.9 cents to settle at $4.774 per 1,000 cubic feet.
In other Nymex trading heating oil fell 0.3 cent to settle at $1.9964 a gallon and gasoline dropped 0.02 cent to settle at $2.0634 a gallon.
In London, Brent crude lost 7 cents to settle at $76.06 a barrel on the ICE Futures exchange.