Separate data on inventories is due from Energy Information Administration By Polya Lesova, MarketWatch FRANKFURT (MarketWatch) -- Oil prices declined on Wednesday, as a report showed an expected increase in crude supplies and stock futures pointed to a lower opening on Wall Street. Crude oil for December delivery dropped 94 cents, or 1.2%, to $78.18 a barrel in electronic trading on Globex. The contract earlier hit an intraday low of $78.06 a barrel. "Retreating equities resulted in some profit-taking activity [in the oil market]," said analysts at Commerzbank in a note to clients. U.S. stock futures on Wednesday pointed to a second straight day of declines, ahead of a slate of earnings and an assessment of the economy from the Federal Reserve. The Fed's Beige Book will be released at 2 p.m. Eastern. "After several days of steady gains, we think the selling may have more room to go, particularly if the dollar strengthens slightly from here," wrote Edward Meir, senior commodity analyst at MF Global. "In fact, we could perhaps sell off to the $75 level, which was trading range resistance that gave way last week and which now should be considered next likely support," Meir said. Crude inventories rose by 3.8 million barrels last week, the American Petroleum Institute reported late Tuesday. Distillate supplies dropped by 998,000 barrels and gasoline stocks declined by 558,000 barrels, the API also said. The Energy Information Administration will release its more closely watched data on Wednesday morning. Analysts polled by Platts expect a build in commercial-crude stocks of 2.2 million barrels for the week ended Oct. 16. They also project a decline of 2.3 million barrels in gasoline stocks and a drop of 1.5 million barrels in distillate inventories. "Should the actual inventory data be considerably higher, the oil price may come under pressure in the afternoon," the Commerzbank analysts said.

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