Oil prices fell below $79 a barrel Wednesday on the New York Mercantile Exchange as the U.S. dollar strengthened and the government reported that crude supplies shrank less than expected. The Energy Department reported that crude inventories shrank by 1.5 million barrels last week. Analysts had expected a 2.2 million-barrel drop. Oil prices are now trading at double the levels seen a year ago, when they fell below $40 a barrel. The rally in oil prices this month has started to push gasoline prices higher. Over the past 10 days, crude futures have risen 10 percent, and retail gasoline prices appear to be moving higher. Retail gasoline prices rose 1.5 cents overnight to an average of $2.62 a gallon (3.8 liters), according to three price-tracking groups. Gasoline prices began to rise over the weekend and are now on the longest upward streak since October. Still, gasoline is cheaper than it was a month ago. There is higher demand for gasoline, up 1 percent over the past four weeks compared with last year. The increased consumption comes even though gasoline costs about $1 a gallon more than it did last year.
