Oil declined after a government report showed that U.S. crude and fuel inventories surged as production advanced to a 19-year high.

Futures fell after the Department of Energy said crude stockpiles rose 1.31 million barrels to 361.3 million last week. A 2 million-barrel gain was the median estimate of analysts surveyed by Bloomberg. Gasoline and distillate inventories also rose. Crude output climbed to 7 million barrels a day, the most since 1993. The U.S. will pump an average 7.93 million barrels a day next year, the department said yesterday.

Increasing output in the U.S. and Canada has bolstered supplies at Cushing, Oklahoma, the delivery point for WTI. Stockpiles at the hub rose 332,000 barrels to a record 50.1 million in the seven days ended Jan. 4.

Crude imports rose 18 percent to 8.34 million barrels a day, the first gain in four weeks. Fuel imports increased 7.8 percent to 2.09 million barrels a day last week.

Gasoline inventories climbed 7.41 million barrels to 233.1 million, versus an expected gain of 2.5 million. Distillate inventories increased 6.78 million barrels to 130.7 million, versus a forecast advance of 1.9 million.

Refineries operated at 89.1 percent of capacity last week, the report showed, down from 90.4 percent the previous week.

The Energy Department raised its oil-price projections for 2013 yesterday and forecast that global consumption will expand to a record. WTI will average $89.54 a barrel, up 1.3 percent from the December estimate of $88.38, it said in the monthly Short-Term Energy Outlook. The U.S. benchmark averaged $94.12 in 2012, less than the December estimate of $94.26.

Crude oil for February delivery fell to $92.68 a barrel on the New York Mercantile Exchange. The contract traded at $93.45 before the release of the inventory report at 10:30 a.m. in Washington. Prices dropped 7.1 percent in 2012, the first decline in four years.

Brent oil for February settlement slipped 58 cents, or 0.5 percent, to $111.36 a barrel on the London-based ICE Futures Europe exchange. The North Sea crude traded at an $18.44 premium to the U.S. benchmark, West Texas Intermediate. The premium has narrowed from $25.53 on Nov. 15.