Oil falls 6% after inventory report

Oil prices fell Thursday after the nation's supplies of crude and gasoline expanded much more than expected last week.

Light, sweet crude for March delivery was down $2.80 to $40.74 a barrel on the New York Mercantile Exchange. Oil was down $1.30 a barrel just before the figures were released.

In its weekly inventory report, the Energy Information Administration said the nation's supplies of crude oil rose 6.1 million barrels in the week ended Jan. 16.

Analysts were expecting crude stocks to have grown 1.9 million barrels, according to a survey by energy research firm Platts.

Supplies of gasoline rose 6.5 million barrels, and supplies of distillates - used to make heating oil and jet fuel - rose 800,000 barrels last week, according to the EIA report.

Gasoline stocks were forecast to rise 1.9 million barrels and distillates supplies were expected to be down 2.25 million barrels.

This week's report, which is normally released on Wednesday, was postponed until Thursday due to the observance of Martin Luther King Jr. Day on Monday.