Oil prices have been falling today, helped by the release of the weekly inventory report which showed larger than expected reserves in the precious crude.

Going into today's report, analysts were expecting to see the Department of Energy announce that oil inventories fell by 1.9 million barrels last week, but in fact we only saw a decline of 1.6 million barrels.

Gasoline is probably more on the minds of most consumers, and what we saw in gasoline demand was even more extreme. Analysts had expected to see a rise of about 500,000 barrels of gasoline supplies last week, but the actual increase came in at 2.9 million barrels, a clear sign that high gasoline prices have forced many of us to cut back on our usage.

What is most interesting about the gasoline situation is that the unexpected sharp rise came despite the fact that refineries were running at less capacity than they were the week before. Last week, refineries were operating at 87.1%, compared with 89.5% the week before. When we look at a year-over-year comparison, gasoline demand in the U.S. is down 2.4% from last year as travelers continue to try to deal with the recent record high prices. Last week was the 13th week in a row where demand has fallen at the pump.

For most of us, falling oil prices are a welcome relief, as this should lead to lower gasoline prices, but we should be careful not to celebrate just yet. Oil can move quickly in either direction, and it was only eight trading days ago that oil hit an all time high of $147.27. Since then prices have dropped to a current price of $127.95.

For now, things are looking a lot better, but let's not forget that we are entering into the hurricane season, which can turn things around really fast, with the first big scare already underway in the Gulf of Mexico. Fears over Hurricane Dolly have subsided a bit though, and that too is helping push prices lower today.

So, hopefully we will continue to see lower oil prices resulting in less pain at the gasoline pumps. Overnight, the national average for gasoline fell again, for the sixth day in a row, and is now sitting at "only" $4.042 a gallon. If we can see oil continue to ease, hopefully we will be looking at gas under $4 again by the end of the month. Only time will tell if that actually will happen or not.

What prices are you seeing at the pumps in your area? I was lucky enough to find some $3.77 gas over the weekend, but for the most part I'm still seeing around $3.95 to $4.05 through most of North Carolina. What about your areas? Let us hear how prices are holding up where you live.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.