The price of oil fell near $94 a barrel Wednesday as the nation's oil supply fell less than expected and demand for gasoline remained weak.
Benchmark crude for July delivery declined $1.90 to close at $94.28 a barrel on the New York Mercantile Exchange.
The Energy Department said U.S. crude oil supplies declined by 300,000 barrels last week to 394.6 million barrels. Analysts expected a decrease of 1.2 million barrels. Gasoline supplies grew by 3 million barrels. At 220.7 million barrels, the gasoline supply is almost 10 percent above year-ago levels. And demand for gasoline over the four weeks ended May 17 was 3.3 percent lower than a year earlier, the Energy Department said in its weekly report.
The figures are another sign that consumers are watching the amount of driving they do. That was likely the case in the Midwest last week, where gas prices spiked in states such as Minnesota and North Dakota because of refinery outages.
The supply report offset a jump in the price of oil after U.S. stock markets opened strongly. Stocks rose when Federal Reserve Chairman Ben Bernanke said it was too soon for the central bank to pull back on its massive economic stimulus programs. A positive report on sales of previously-occupied U.S. homes also supported stocks.
At the pump, the average price of a gallon of gasoline rose a penny to $3.66 just ahead of Memorial Day weekend. That's 7 cents higher than a week ago.
Brent crude, a benchmark for many international oil varieties, dropped $1.31 to $102.60 a barrel on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
— Wholesale gasoline fell 3 cents to $2.82 a gallon.
— Heating oil lost 6 cents to $2.87 a gallon.
— Natural gas was flat at $4.19 per 1,000 cubic feet.
Pablo Gorondi in Budapest and Pamela Sampson in Bangkok contributed to this report.
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