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Oil drops 1.5 percent; gains could be tapering off

The price of oil began to fall in the early afternoon after reports surfaced that the Seaway pipeline, which takes crude from Cushing to the Gulf Coast, was constrained and could only work at about half its 400,000 barrel-per-day capacity.
By The Associated Press Published: January 24, 2013

“There's a logjam down there,” Lebow said. “Inventories have the potential to build further and they are already at record highs.”

Analysts were already forecasting that the U.S. government would report a 2 million-barrel increase in oil supplies in its weekly update Thursday, according to Platts, a division of McGraw-Hill.

U.S. drivers won't mind if oil prices level off or fall. The average price for a gallon of gas has gone up nearly 10 cents since Dec. 21. But the increase so far in January is just 2 cents a gallon. Last year gas prices rose an average 16 cents in the first month and kept rising until reaching a peak of $3.94 a gallon in early April.

Brent crude, used to price international varieties of oil, rose 38 cents to end at $112.80 per barrel on the ICE Futures exchange in London.