Oil recovers some losses on upbeat Fed report

The price of oil regained some of its earlier losses on Wednesday after a report from the Federal Reserve showed the economy strengthened across much of the country.

Benchmark oil for April delivery fell 39 cents to finish at $90.43 a barrel on the New York Mercantile Exchange.

It had dropped as low $89.55 after the government reported a big increase in the nation's stockpile of oil.

But crude clawed back some ground when the Fed's Beige Book report showed that auto sales, more hiring and the ongoing housing recovery helped the U.S. economy grow in January and February.

Earlier the Energy Department's Energy Information Administration said in its weekly report that U.S. oil supplies grew last week by 3.8 million barrels, or 0.4 per cent, more than three times the increase that analysts expected.

The nation's supply of crude is 10.3 percent above year-ago levels. And at more than 7 million barrels a day, U.S. oil production is at the highest level since the late 1990s.

Falling oil prices have spelled some relief for U.S. drivers. The average price of a gallon of gas fell for a seventh straight day, to $3.73 a gallon.

That's still up 21 cents from a month ago, but down 3 cents from this time last year.

The death of Venezuela President Hugo Chavez had little immediate effect on the price of oil.

The full impact of his death may not be felt until Venezuela, which sits on the world's second-largest oil reserves, picks a new leader — one who might choose a course different from Chavez.

Elections are expected to be called within a month.

AP