Oil prices fell Wednesday after the U.S. Energy Department said crude-oil inventories fell less than expected last week while demand for gasoline declined almost 2 percent. In its weekly petroleum inventory report, the department's Energy Information Administration (EIA) said crude supplies fell 1.2 million barrels last week, less than the 2 million-barrel decline expected by analysts. Demand for gasoline is down 1.8 percent over the last four weeks compared to the same period a year ago, EIA said. However, gasoline inventories fell 1.2 million barrels, in contrast to analysts' expectation of a 1 million-barrel increase. The mixed news initially caused oil prices to jump more than a dollar. Later, light sweet crude for July delivery was down about $1.50 to around $132.50 on the New York Mercantile Exchange. In a separate report Wednesday, the American Petroleum Institute (API) said gasoline demand fell 1.4 percent in May, as measured by deliveries, lowering year-to-date demand for gasoline by 1 percent. It was the first decline in gasoline demand over the first five months of any year since 1991, API said. Demand for oil over the first five months of the year was down 2.5 percent from last year, the trade group said. Meanwhile, the average retail price of gasoline in the United States fell slightly overnight to just above $4.07 a gallon (3.8 liters). It was the second consecutive daily decline, bringing prices half a cent below the latest record high of $4.08 a gallon, set Monday.
