Gasoline futures jumped almost 2 percent on Wednesday after the U.S. government reported an unexpected decline in the country's supplies. The drop in gasoline inventories could eventually push retail prices higher, but that has not happened so far, as prices have fallen for three consecutive weeks. The Energy Department reported that gasoline inventories fell by 1.3 million barrels last week, and they fell as U.S. refineries continued to produce less fuel. The report by the department's Energy Information Administration (EIA) said refineries were operating at the lowest level on record, excluding a few weeks in 2008 and 2005 when hurricanes forced shutdowns along the Gulf of Mexico. The slowdown in U.S. refining comes as higher oil prices further tighten profit margins. Meanwhile, crude prices continued to rise Wednesday despite an increase in U.S. oil inventories last week. U.S. petroleum consumption has been dropping since 2007, and the EIA report said the country has been using less each week for the past month. Light sweet crude for March delivery was up slightly near $77.50 in midday trading on the New York Mercantile Exchange. Analysts said oil prices are rising because of expectations of increased global demand. Over the past several months, investors have bet that China and other developing countries will need more fuel this year, helping to push oil prices to a 15-month high in January.
