NEW YORK (AP) -- Oil prices fell Wednesday after the government reported swelling inventories of gasoline, heating oil and diesel fuel. Crude oil stockpiles fell for the fourth straight week, according to a weekly inventory report by the Energy Information Administration. But inventories of refined products grew faster than market analysts had expected, pressuring prices lower.Light, sweet crude for February delivery dropped $1.46 to $54.18 a barrel on the New York Mercantile Exchange, after sinking to $53.89 in earlier trading. The contract touched $53.88 on Tuesday _ a level not seen since June 13, 2005. February Brent crude fell $1.40 to $53.78 a barrel on the ICE Futures exchange in London.
"This is what should have been expected," said Fadel Gheit, an energy analyst with Oppenheimer & Co. "The $70 and $60 oil were more of an aberration than reflective of global supply and demand. We've been on a high, believing it would last forever." Gheit said the market has forgotten about the "big picture" _ that oil historically has cost a whole lot less. A barrel of oil fetched $41 on average in 2004 and $30 in 2003.
Gasoline inventories increased again last week, rising 3.8 million barrels to 213.3 million barrels following a 5.6-million-barrel jump in the prior week. Market analysts had expected on average a more modest rise of 2.5 million barrels. Distillate stocks, which include heating oil and diesel fuel, climbed by 5.4 million barrels to 141 million barrels _ well above the market estimate for an increase of 1.9 million barrels _ as warm weather persisted in the Northeast last week.