Oil dropped Wednesday after a government report showed that supplies of petroleum products are growing as demand weakens in the U.S.
The Energy Information Administration said that oil supplies increased by 3.4 million barrels last week -- twice as much as energy analysts expected. The government also reported that gasoline demand averaged 9.1 million barrels per day, down almost 2 percent from a year ago.
Benchmark crude for June delivery lost $2.01 at $109.04 per barrel on the New York Mercantile Exchange. In London, Brent gave up $1.40 at $121.05 per barrel on the ICE Futures exchange.
Energy experts have said for months that higher gasoline prices are forcing drivers to buy less fuel. In its weekly report, MasterCard SpendingPulse said the four-week average of gasoline purchases in the U.S. dropped for the sixth consecutive week, compared with a year ago. EIA said the four-week average wholesale gasoline demand also has dropped for the sixth straight week.
The drop in consumption hasn't kept pump prices from rising. Gasoline has increased for 43 days straight, hitting a national average of $3.982 per gallon on Wednesday, according to AAA, Wright Express and Oil Price Information Service. Pump prices have increased 91 cents per gallon since the beginning of the year. A gallon of regular now costs more than $4 in 13 states and Washington, D.C.
In other Nymex trading for June contracts, heating oil lost 4 cents at $3.1542 per gallon and gasoline futures fell 4 cents to $3.2935 per gallon. Natural gas lost 3 cents at $4.703 per 1,000 cubic feet.
