Oil prices fall as supplies grow

NEW YORK — Oil prices fell from earlier highs on Wednesday, as investors kept an eye on unrest in Egypt, and the U.S. Energy Department reported crude oil and gasoline supplies grew last week.

West Texas Intermediate crude for March delivery dropped 53 cents to $90.24 per barrel in afternoon trading on the New York Mercantile Exchange, while Brent crude lost 19 cents at $101.55 on the ICE Futures Exchange in London.

Prices dropped as oil tankers continued to move through the Suez Canal without incident. Egypt controls the canal and a nearby pipeline. Between them they carry more than two million barrels of oil a day from the Middle East to customers in Europe and America. PFGBest analyst Phil Flynn noted that two million barrels is a relatively small amount compared with the 87 million barrels consumed worldwide every day.

Regional conflicts have shut down the canal in the past. Barclays Capital noted that the Suez was blocked for several months during the 1956 Suez Crisis. The Egyptian military also installed a blockade for eight years following the Six Day War with Israel in 1967.

"Nevertheless, the canal does not appear to be under immediate threat," Barclays analyst Helima Croft said. Closing the canal altogether would require the Egyptian military, "and I don't see that happening right now," she said.

Rising supplies of oil and gasoline in the U.S. helped bring down oil prices on Wednesday. The Energy Information Administration said that crude supplies increased for the third straight week, and gasoline stocks grew to the highest level since March 1993. The U.S. is sitting on 343.2 million barrels of crude and 236.2 million barrels of gasoline.

Gasoline pump prices around the country increased less than a penny overnight to a national average of $3.108 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is 3.6 cents higher than it was a month ago, and 44.7 cents more expensive than a year ago.

In other Nymex trading for March contracts, heating oil added a penny to $2.7625 per gallon. Gasoline futures fell 2 cents to $2.4950 per gallon and natural gas rose 3 cents to $4.375 per 1,000 cubic feet.