Oil trims advance after supply increase (by Claudia Assis)

SAN FRANCISCO (MarketWatch) -- Crude-oil futures pared gains Wednesday after a weekly government report showed a suprise increase in supplies. Oil for September delivery (cl1u) added $1.59, or 1.9%, to $88.35 a barrel on the New York Mercantile Exchange. It was trading around $88.90 before the data. The Energy Information Administration reported an increase of 4.2 million barrels for the week ended Aug. 12, compared to expectations for a decline of 500,000 barrels, according to analysts polled by Platts. The EIA said gasoline inventories declined 3.5 million, and supplies of distillates, which include diesel and heating oil, rose 2.4 million. The analysts had expected a decrease of 2.3 million barrels for gasoline supplies and distillates up 700,000 barrels.