Oil prices dipped Wednesday ahead of a government report that is likely to show domestic supplies of crude grew because of continuing weakness in the economy.
Benchmark crude for May delivery fell $1.32 to $52.66 a barrel on the New York Mercantile Exchange.
Prices at the pump were another story. National retail gasoline prices hit the highest level this year and are on pace to surpass $2 by Friday. Prices have risen 6 cents nationally this week.
The cost of gas usually heads higher this time of year as refineries shut down for maintenance ahead of the summer driving season, but they've shut down earlier this year because Americans are driving a lot less.
Prices hit $1.986 Wednesday, according auto club AAA, Wright Express and Oil Price Information Service. Prices are 7.6 cents higher than a month ago, but $1.269 below year-ago levels.
In London, Brent prices shed $1.36 to $52.14 on the ICE Futures exchange.
Oil prices rallied all last week and again on Monday amid gains in stock markets and optimism about a U.S. government plan to buy up toxic assets from banks. A weaker dollar has also caused investors to flee to commodities like oil, which have risen more than 30 percent this month.
Prices have risen about 30 percent this month even as supplies continue to rise, hitting a 20-month high last week, according to oil trader and analyst Stephen Schork.
Analysts expect the Energy Information Administration to report a 1.4 million barrel build up in crude oil stocks, according to a survey by Platts.
Analysts also are looking for a 900,000 barrel draw in gasoline stocks and a 200,000 barrel draw in distillates stocks used for diesel fuel and heating oil.
But with the dollar recovering Wednesday against the euro and the British pound, a possible bullish factor for oil prices was off the table, while the decline of the global economy is still worrisome.
"The oil market feels like its gotten too high in too short of a time frame," wrote Tom Pawlicki of MF Global Research.
Prices did not receive any support after the government reported that orders to U.S. factories for big-ticket manufactured goods unexpectedly rose in February after a record six straight declines.
The Commerce Department says durable goods orders increased 3.4 percent last month, much better than the 2 percent fall economists expected. It was the first advance since July and the strongest one-month gain in 14 months.
The strength was led by a surge in orders for military aircraft and parts, but demand for machinery, computers and fabricated metal products also rose.
Still, the rebound was expected to be temporary given all the problems facing the economy, and a large drop in orders in January was revised even lower.
In other Nymex trading, gasoline for April delivery fell less than a penny to $1.494 a gallon, while heating oil lost 3.4 cents to $1.4654 a gallon. Natural gas for April delivery fell 7.4 cents to $4.273 per 1,000 cubic feet.
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Associated Press writers Martin Crutsinger in Washington, Pablo Gorondi in Budapest, Hungary, and Eileen Ng in Kuala Lumpur, Malaysia, contributed to this report.
