WASHINGTON, AP – Crude-oil futures eased for the third straight day Wednesday, trading below $73 a barrel after U.S. government data showed a decline in domestic gasoline inventories but also an apparent weakening of motor-fuel demand.
On Tuesday, President Bush announced moves aimed at averting a fuel supply crunch, though analysts said they would have minimal impact.
Light sweet crude for June delivery fell 48 cents to $72.40 on the New York Mercantile Exchange, where prices hit an intraday peak last Friday of $75.35. Gasoline futures rose less than a penny to $2.14 a gallon.
In London, Brent crude futures fell 47 cents to $72.74 a barrel on the ICE Futures exchange.
Despite the recent declines, oil prices remain about a third higher than a year ago, and the average retail price of gasoline in the U.S., the world’s largest energy consumer, is $2.91 a gallon.
However, there is evidence that motorists are not as eager to drive as they were at this time last year.
In its weekly report, the U.S. Energy Department said the amount of gasoline supplied to the market each day — a proxy for demand — is up just 0.3 percent over the past month, compared with the same period in 2005. At this time last year, demand for the four-week period had risen 1.5 percent, compared with the same period in 2004.
The government report also showed that domestic crude oil inventories fell by 200,000 barrels last week to 345 million barrels, or 5.6 percent above year-ago levels. Gasoline inventories shrank by 1.9 million barrels to 200.6 million barrels, or 5.6 percent below year-ago levels. Supplies of distillate fuel, which include heating oil and diesel, increased by 1 million barrels to 115.6 million barrels, or 10.6 percent higher than last year, the agency said.
Refineries ran at 88.2 percent of their capacity, up 2 percent from a week ago, while crude-oil imports rose by 199,000 barrels a day to 9.86 million barrels a day.
On Tuesday, Bush gave the Environmental Protection Agency the authority to relax regional clean-fuel standards to attract more imports of gasoline to the United States and to make it easier for supplies to be moved from one state to another.
Bush also said he would defer shipments of crude oil into the U.S. Strategic Petroleum Reserve until the fall.
Bush was reacting to soaring gasoline prices, which make motorists in the world’s largest energy consuming nation mad, putting politicians of both parties on the defensive about what they are doing to address the situation. Pump prices are about 32 percent above year-ago levels one month before the Memorial Day holiday, which traditionally kicks off the summer driving season, when demand peaks.
Oil traders are nervous about a variety of political tensions rattling oil producing nations, such as the West’s nuclear standoff with Iran, violence in Nigeria and moves toward greater nationalization of natural resources in Venezuela.
In a further escalation of the war of words between Iran and the West, Iran threatened Tuesday to begin hiding its nuclear program if the West takes any “harsh measures” against it — Tehran’s sharpest rebuttal yet to the U.N. Security Council’s Friday deadline for Iran to suspend uranium enrichment or face possible sanctions.
In other Nymex trading, heating oil futures slipped 1.7 cent to $2.04 per gallon, while natural gas futures fell 12.4 cents to $7.13 per 1,000 cubic feet.