10/24/2012 03:59 EDT | Updated 12/24/2012 05:12 EST

Crude oil price falls on unexpectedly big increase in US supplies

NEW YORK, N.Y. - The price of oil fell Wednesday after the U.S. government reported an unexpectedly large increase in crude stockpiles.

Oil supplies grew last week by 5.9 million barrels, or 1.6 per cent, the Energy Department said. At 375.1 million barrels, the U.S. oil inventory now is 11.1 per cent above year-ago levels. Analysts had expected a much smaller increase.

Benchmark West Texas Intermediate crude fell 94 cents, or about one per cent, to finish at US$85.73 a barrel in New York. The price has fallen almost seven per cent since closing Oct. 18 at US$92.10.

Brent crude fell 40 cents to end at US$107.85 per barrel in London.

Jim Ritterbusch of Ritterbusch and Associates said the oil market may be looking forward to Friday's initial estimate of U.S. third-quarter gross domestic product. "Any additional indications of weakening in the world's largest economy could force further liquidation out of the oil space," he said.

In other energy futures trading in New York, wholesale gasoline fell less than a penny to finish at US$2.60 a U.S. gallon (3.79 litres). Gasoline supplies grew by 1.4 million barrels to 198.6 million barrels last week, the government said.

Heating oil also fell less than a penny to end at US$3.04 a gallon, while natural gas fell 8.5 cents to finish at $3.45 per 1,000 cubic feet, reversing Tuesday's gains.