Oil retreats as gasoline supplies surge

Crude also declines less than expected; prices slide

September 27 2006: 10:40 AM EDT | NEW YORK (CNNMoney.com) -- Oil prices erased most of their gains Wednesday after the government said supplies of crude oil fell far less than expected while gasoline stocks surged.

U.S. light crude for October delivery was up 10 cents to $61.11 a barrel on the New York Mercantile Exchange, having turned lower briefly after the report's release. Oil traded up 60 cents just prior to the report's release.

In its weekly inventory report, the Energy Information Administration said crude stocks slipped by 100,000 barrels last week. Analysts were looking for a decline of 1.7 million barrels, according to Reuters.

Gasoline supplies swelled by 6.3 million barrels, while distillates, used to make heating oil and diesel fuel, rose by 2.3 million barrels. Analysts were looking for a 500,000 barrel increase in gasoline supplies and a 2.3 million barrel build in distillates.