Inventories gained 803,000 barrels to 301.8 million last week, the Energy Department said. Fuel demand averaged 20.2 million barrels a day in the past four weeks, down 2.3 percent from a year earlier, the report showed.
Crude oil for August delivery declined $4.08, or 3 percent, to $132.92 a barrel at 12:50 p.m. on the New York Mercantile Exchange. Prices, which reached a record $139.89 on June 16, have almost doubled from a year ago.
Gasoline for July delivery fell 11.02 cents, or 3.2 percent, to $3.3533 a gallon in New York. Futures reached a record $3.5762 a gallon on June 16.
Pump prices are closely tracking futures. Regular gasoline, averaged nationwide, fell 0.2 cent from to $4.067 a gallon, AAA, the nation's largest motorist organization, said today on its Web site. Pump prices reached a record $4.08 a gallon on June 16.
Gasoline demand has averaged 9.28 million barrels a day over the past four weeks, down by 2.1 percent from the same period last year, the department said. Demand for distillate fuel, a category that includes heating oil and diesel, averaged 4.06 million barrels a day, down by 1.1 percent from a year earlier.
Consumption of gasoline in the U.S. increases during the summer, when Americans take to the highways for vacations. The peak-consumption period lasts from the Memorial Day weekend in late May to Labor Day in early September.
Oil supplies dropped 24.8 million barrels, or 7.6 percent, in the five weeks ended June 13. Inventories last week were down 6.3 percent from the five year average for the period, less than the 6.7 percent deficit a week earlier, the department said.
Gasoline stockpiles fell 153,000 barrels to 208.8 million barrels, the department said. Analysts surveyed before the report were split over whether supplies would rise or fall.
Saudi Arabia, the world's top oil producer and the most influential member of the Organization of Petroleum Exporting Countries, said on June 22 it would increase daily crude-oil output by 200,000 barrels to 9.7 million barrels next month.