Oil falls on gasoline inventory data

Oil prices are retreating today following this week's report that shows gasoline inventories rising more than analysts had been expecting. So far on the day oil prices have pulled back $0.92 to $62.57 in today's action.

When The Energy Information Administration released this week's inventory report, analysts had been expecting to hear that gasoline inventories had risen by 1 million barrels, but in fact the report indicates a rise of 1.3 billion barrels.

While it is good to see the nation's gasoline stockpiles rising, don't expect to see too much relief at the pump just yet. This past weekend we officially entered the high-demand summer driving months, which is sure to apply future upward pressure on prices. The recent record-high gasoline prices have been mostly a result of unusually low output from the nation's refineries and we still have not seen production really start to climb.

Despite the rise in gasoline reserves, oil inventories fell last week while analysts had expected a slight rise, but so far the market is giving more weight to the unexpected rise in gas. Oil inventories fell by 2 million barrels last week, while analysts had been planning to see an increase of around 300,000 barrels.