Oil dips below $77 per barrel

NEW YORK -- Oil prices dipped Wednesday with more evidence that the U.S. is using less energy while oil and gasoline stockpiles continue to grow.

Demand for gasoline slumped during the Thanksgiving week, when millions of Americans take to the road and gas sales usually jump.

"Once the holiday was over, people got right back to their cocooning habits, stayed home and didn't do a lot of driving," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.

Benchmark crude for January delivery dropped $1.77, or more than 2 percent, to settle at $76.60 a barrel on the New York Mercantile Exchange.

The Energy Information Administration reported Wednesday that oil supplies grew last week, a surprise to most analysts, and that the amount of gasoline in storage surged by 4 million barrels.

The reason is that refineries, which turn crude in to fuel, are cutting back on production with fewer consumers and businesses buying it.

The EIA reported refineries had slowed operations dramatically, running at less than 80 percent capacity for only the second week this year.

Meanwhile, a private report showed the U.S. economy shed more jobs last month than expected. The ADP National Employment Report said 169,000 private sector jobs were lost in November. That's less than October but worse than what was expected by economists polled by Thomson Reuters.

In other Nymex trading in contracts for January delivery, natural gas shed 22.8 cents to $4.534 per 1,000 cubic feet, heating oil fell 3.84 cents to $2.0396 a gallon, and gasoline lost 5.48 cents to $1.9875 a gallon.