LONDON (SHARECAST) - Crude oil prices settled lower on Wednesday after a government report showed a larger than expected increase in US fuel supplies. Crude for January delivery settled down 41 cents at $88.28 a barrel on the New York Mercantile Exchange. The Energy Information Administration posted a fall in crude oil but gasoline and distillates both rose. Crude fell by 3.8m barrels confounding expectations of a 1.2m barrel drop. Even so crude oil stockpiles remain significantly above average levels in the US, one reason crude prices have been held back from gains seen elsewhere in the commodities sector. Gasoline inventories rose by 3.8m barrels while distillates increased by 2.2m barrels. Analysts had pencilled in a 100,000 barrel increase for gasoline and a 600,000 barrel decline for distillates. Crude oil futures stooped to an intraday low of $87.33 after the DOE report was released. The stronger dollar also pressured crude prices. Focus for the rest of the week will likely land on OPEC’s meeting on Saturday in Ecuador. No major announcements are expected but production targets are expected to be one area of discussion. Meanwhile profit takers took a chunk out of gold prices on Wednesday after the precious metal returned to record territory earlier in the week. Gold for February fell $25.80 to settle at $1,383.20 an ounce on the Comex division of the New York Mercantile Exchange.

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