Crude oil futures fell from a record of $102.08 a barrel on Wednesday after the U.S. Government reported that crude inventories rose, exceeding forecasts.
A weekly report from the U.S. Energy Department today showed that crude inventories increased for a seventh week by 3.23 million barrels to 308.5 million barrels for the week ending February 22.
Forecasts anticipated stockpiles growth of 2.1 million barrels. It is the highest increase since November. Stockpiles have risen 9.1 percent in the past seven weeks.
In the same way, gasoline stockpiles rose 2.35 million barrels to 232.6 million, the 16th straight gain, the Energy Department reported. Distillates, including heating oil, declined by 2.5 million barrels.
Crude oil futures for delivery in April dropped $1.20, or 1.19 percent to $99.68 a barrel on the New York Mercantile Exchange at 3:53 p.m.
Brent crude futures for April fell $1.24, or 1.23 percent, to $99.64 a barrel on the London ICE Futures Exchange. Brent futures hit a record of $100.53 on Wednesday before falling.
Earlier in the session, oil futures prices surged to a historical record of $102.08 a barrel in New York as the dollar fell to $1.5088 per euro, the lowest since the European currency was launched in 1999. Dollar fell on weak U.S. economic data released this week for categories including durable goods, consumer confidence and housing data.
The slumping U.S. currency also sent gold futures to a record high of $967.70 an ounce on Wednesday.
Federal Reserve Bank President Ben Bernanke said today that the falling dollar is affecting the price of oil. The Fed chief was giving his outlook for the U.S. economy before the House Financial Services Committee in Washington. His comments signaled that the U.S. central bank is ready to cut interest rates again to boost economic growth.
Analysts said the probability of further rate cuts by the Fed could weaken the dollar further, boosting oil.
Prices were also supported by colder weather in the Northeastern part of the U.S. known, which has the largest heating oil market of the world.
Specialists also speculate that the Organization of Petroleum Exporting Countries will not raise and could even reduce production of crude at its meeting on March 5.