Oil reserves fall; gasoline surges

NEW YORK — Crude oil reserves fell more than expected last week while gasoline stockpiles expanded, the government said Wednesday.

Crude inventories dropped 2.8 million barrels, or 0.8 percent, to 344.5 million barrels, which is 16.5 percent above year-ago levels, the Energy Department's Energy Information Administration said in its weekly report.

Analysts had expected a drop in crude inventories of 2.1 million barrels for the week ended July 10, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Gasoline inventories rose by 1.5 million barrels, or 0.7 percent, to 214.6 million barrels, which is 2.3 percent above year-ago levels. Analysts expected stockpiles of the motor fuel to rise by 750,000 barrels.

Demand for gasoline over the four weeks ended July 10 was 0.6 percent higher than a year earlier, averaging nearly 9.1 million barrels a day.

At the same time, U.S. refineries ran at 87.9 percent of total capacity on average, an increase of 1.1 percentage points from the prior week. Analysts expected capacity to slip to 86.5 percent.

Inventories of distillate fuel, which include diesel and heating oil, rose by 600,000 barrels to 159.3 million barrels for the week ended July 10. Analysts expected distillate stocks to increase by 1.6 million barrels.

Benchmark crude for August delivery increased 98 cents to $60.50 per barrel on the New York Mercantile Exchange.