Oil prices fell sharply from a record high on Wednesday after a US government report showed near-record crude imports lifting stockpiles unexpectedly in the world's largest energy consumer.
US light sweet crude for September delivery fell $1.03 to $60.86 on the New York Mercantile Exchange, after hitting a record $62.50 earlier in the day. London Brent crude was down 97 cents at $59.65, after peaking at $61.26 a barrel on the International Petroleum Exchange.
The US Energy Information Administration said in a weekly report Wednesday morning that crude oil inventories rose last week by 200,000 barrels, countering expectations among analysts that stockpiles would decline by 1.6 million barrels.
The surprise increase came as imports soared to their third-highest on record, near 11 million barrels per day, countering higher demand from refineries and slow shipments from Mexico after recent storms.
"It's unusual to see builds at this time of the year in crude, but imports are very strong," said Bill O'Grady, director of futures research at A.G. Edwards.
Tempering Wednesday's losses were lingering concerns about recent refinery troubles in the United States and Venezuela, and declines in national stockpiles of gasoline as the high-demand summer driving season drags on.
US gasoline inventories fell 4 million barrels last week to the low end of the average range for this time of year, with demand some 1.1 percent higher than a year ago, the EIA said.
General Motors Corp said sales of gas-guzzling sport utility vehicles were at an all-time high in July.
A half-dozen refineries in the United States have sustained unplanned unit shutdowns since late July, along with several in Venezuela, underscoring worries that hard-working plants are becoming increasingly vulnerable to problems ahead of seasonal maintenance in the autumn.
"Each problem is just a reminder as to how close to the edge we are running," said Deborah White, senior economist at SG Commodities. "The refiners have been running a marathon for two years. They are exhausted."
Among the latest refinery troubles, BP Plc shut two of its three gasoline-making fluid catalytic cracking units at its refinery in Texas City, Texas, this week, Motiva Enterprises shut a crude unit in Norco, Louisiana, and Exxon Mobil Corp shut its plant in Joliet, Illinois.
Oil prices are up more than 40 percent since the start of the year, boosted by worries the world's over-stretched production capacity will struggle to satisfy voracious demand from the United States and the rapidly growing economies of countries such as China and India.
"The economy is moving along pretty well. It's a fairly consistent theme that high prices are not damaging global growth," said Kevin Norrish, an analyst at Barclays Capital.
Worries that a record start to the Atlantic hurricane season could spell trouble to come for US offshore oil producers have also underpinned recent strength in the oil markets.
As many as 21 named storms and 11 hurricanes are forecast for the 2005 hurricane season, matching a record set in 1933, US government forecasters said on Tuesday.
Hurricanes and smaller storms already have disrupted US Gulf of Mexico production this year, although none has been as destructive as last September's Hurricane Ivan.
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