Oil falls on expected supply increase, weak demand

AP News
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Posted: May 04, 2011 10:20 AM
Oil falls on expected supply increase, weak demand

Oil is falling after more signs that supplies of petroleum products are rising and demand is falling in the U.S.

An industry survey by the American Petroleum Institute says that U.S. crude supplies unexpectedly grew by 3.2 million barrels last week. The government's Energy Information Administration will release its official figures on Wednesday as well.

Benchmark crude for June delivery lost $1.39 at $109.66 per barrel on the New York Mercantile Exchange. In London, Brent is down 85 cents at $121.60.

MasterCard SpendingPulse in its weekly survey said Americans are buying less gasoline. SpendingPulse said the four-week average of retail gas demand dropped for the sixth consecutive time.

Pump prices are still rising. The national average is $3.982 per gallon, up more than a dime from a week ago.