Oil prices dropped Wednesday after a government report showed U.S. fuel supplies continuing to grow, with Americans buying less gasoline despite prices sharply below last year's levels. Light sweet crude for September delivery was down slightly to around $65.50 a barrel in midday trading on the New York Mercantile Exchange after falling as low as $63.76 earlier in the session. Energy prices have been rising this week, largely due to better-than-expected corporate profits and bets the U.S. economy was improving. But on Wednesday, traders focused on the Energy Information Administration (EIA) report showing massive supplies of gasoline and distillates, including diesel, heating oil, and jet fuel. U.S. gasoline inventories grew to 215.4 million barrels last week, about 3 percent above year-ago levels, when $4-per-gallon (3.8 liters) fuel reduced driving. Distillates are rising to their highest level since the mid-1980s. Growing supplies of both fuels reflect how much consumers have reduced energy consumption this year.
