Oil treaded water at $134 per barrel Wednesday after the U.S. Energy Information Administration announced that weekly crude oil inventories fell a smaller-than-expected 1.2 million barrels.

Economists surveyed by Bloomberg News had expected crude oil inventories to decrease by 1.75 million barrels last week. Also, gasoline supplies fell 1.2 million barrels.

The decrease in oil inventories had little affect on oil prices, at least initially. In mid-day Wednesday trading, oil was up 5 cents to $134.06 per barrel. The other major energy commodities were also virtually unchanged. Unleaded gasoline fell about 1 cent to $3.39 per gallon. Heating oil fell about 2 cents to $3.60 per gallon. Natural gas gained 7 cents to $13.02 per million BTUs.

U.S. crude oil inventories now stand at 301 million barrels and are at the lower boundary of the average range for this time of year, the EIA said. Oil inventories have dropped for five straight weeks, resulting in a reduction of 25 million barrels. Also, over the last four weeks oil imports averaged about 9.7 million barrels per day, down about 487,000 barrels per day compared to the same period a year ago.

Meanwhile, refineries operated at 89.3% of their operable capacity last week, an increase from the 88.6% statistic registered for the week ending June 6, 2008.

Oil Analysis: Notch one for the oil bears, famous last words. Oil futures did not jump, despite the fifth consecutive weekly decline in oil inventories. True, this week's inventories fell less than expected, but the key driver of price at this juncture is Saudi Arabia's expected increase in production, and its accompanying June 22 summit of oil producers and consumers in Jeddah. Absent some other supply disruption due to natural or man-made forces, traders are reluctant to add to oil-long positions ahead of the Jeddah summit, with new supply likely to be added to global oil markets.