Oil and gas prices plunged to their lowest levels of the year Wednesday after the government reported that supplies grew more than expected.
The Energy Information Administration said that the nation's oil supply swelled by 3.7 million barrels last week, well above the average for this time of year. Gasoline supplies grew by 3.8 million barrels.
The country's demand for petroleum products also fell by nearly 1 percentage point from last year, showing the country has an even smaller appetite for energy now than when it was in recession.
Prices tumbled shortly after the report.
Benchmark crude for February delivery gave up $1.48 to $79.31 a barrel on the New York Mercantile Exchange. Crude fell as low as $78.37 earlier in the day.
Oil prices had been surging all month, rising to a 15-month high near $84 as a bitter chill swept across parts of the U.S., Europe and Asia.
The rally in crude has tugged retail gas prices higher every day since Christmas. Pump prices increased again overnight by less than a penny to a new national average of $2.757 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service.
A gallon of regular unleaded is 15.4 cents more expensive than last month and 96.7 cents more expensive than a year ago.
In other Nymex trading in February contracts, heating oil fell 5.15 cents to $2.0803 a gallon and gasoline dropped 4.44 cents to $2.0534 a gallon. Natural gas futures lost 5.2 cents to $5.539 per 1,000 cubic feet.
In London, Brent crude for February delivery fell $1.91 to $77.39 a barrel on the ICE Futures exchange.
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