Oil futures rose to a fresh record Wednesday, then fluctuated after the U.S. Energy Department reported mixed petroleum inventories. The department's Energy Information Administration (EIA) said in its weekly report that gasoline demand rose slightly while supplies of distillate fuels fell unexpectedly. However, the EIA also said crude supplies rose much more than expected and gasoline inventories increased in contrast to an expected decline. In the minutes after the report was released, light sweet crude oil for June delivery fell by more than a dollar, then jumped to a new trading record of $122.81 a barrel on the New York Mercantile Exchange. In later trading, futures fell to around $121.50 a barrel. Oil prices have risen in recent months on a mix of concerns about supply disruptions in Nigeria and the Middle East amid growing demand in fast-growing economies such as China and India. But the U.S. dollar's continuing decline versus the euro and the yen also has played a major role in oil's rise. Oil's price increase so far this decade has led to record spending on drilling and equipping wells in the United States. A new survey from the American Petroleum Institute says industry spending on wells jumped 44 percent in 2006 to almost $110 billion. Meanwhile, U.S. retail gasoline prices rose Wednesday for the first time since last week, adding 0.8 cent to nearly $3.61 a gallon (3.8 liters). Gasoline prices are expected to rise to an average of $3.73 a gallon next month, according to the latest Energy Department forecast. Diesel fuel also rose Wednesday, adding 0.5 cent to just over $4.24 a gallon, within one cent of the record high set on May 1. While high gasoline prices are hurting drivers, high diesel prices are hurting consumers in grocery and retail stores.
