Updated

Crude-oil futures eased for the third straight day Wednesday, falling below $72 a barrel after U.S. government data showed motor-fuel demand weakening in what appeared to be a response to higher pump prices.

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The data also showed domestic inventories of gasoline shrank for the eighth consecutive week, and that may have moderated the selling, analysts said.

The U.S. Energy Department said gasoline demand was up 0.3 percent over the past four weeks compared with the same period in 2005. But at this time last year, demand for the four-week period had risen 1.5 percent compared with the same period in 2004.

"It takes a real big price increase to get a little bit of reduced consumption," said Jerry Taylor, a senior fellow at the Cato Institute.

The average retail price of gasoline in the U.S. is now $2.91 a gallon, or 68 cents higher than a year ago.

Tom Kloza, an analyst at Oil Price Information Service, predicted that consumption will fall below year ago levels within a few weeks.

Light sweet crude for June delivery fell as low as $71.85 on the New York Mercantile Exchange, before rebounding slightly to settle at $71.93, a decline of 95 cents. Last Friday, crude futures hit an intraday peak of $75.35.

Gasoline futures gained 0.44 cent to finish at $2.1335 a gallon.

With demand cooling off and refiners gradually increasing production, Alaron Trading Corp. analyst Phil Flynn said that gasoline futures prices may have reached a peak — "which probably means we're getting close to a peak for retail prices."

In London, Brent crude futures fell $1.12 to $72.09 a barrel on the ICE Futures exchange.

Despite the recent declines, oil prices remain about a third higher than a year ago because of supply disruptions, geopolitical tensions and the scant surplus production capacity available to the industry in the event of a major output hiccup. Analysts also said they expect global energy demand to remain strong.

Most prominent among the supply disruptions is some 450,000 barrels per day of Nigerian crude that is not being produced by Royal Dutch Shell PLC because of violence in the region. On the geopolitical side, the West's effort to contain Iran's nuclear ambitions is the top concern.

On Tuesday, President Bush announced moves aimed at averting a domestic fuel supply crunch, including giving the Environmental Protection Agency the authority to relax regional clean-fuel standards as a way 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. Analysts said this and other moves would have minimal impact in bringing down gasoline prices, where are mainly elevated because of the high price of crude oil.

The Energy Department report 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.

In other Nymex trading, heating oil futures slipped 3.5 cents to settle at $2.0229 per gallon, while natural gas futures fell 5.6 cents to finish at $7.198 per 1,000 cubic feet.

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