Oil slips as Americans’ appetites for expensive gasoline wanes

Oil prices slipped on Wednesday, holding their losses after the U.S. Energy Information Administration (EIA) reported a smaller-than-expected draw in weekly inventories.

According to the EIA, weekly crude stocks fell by 1.4 million barrels in the prior week, below the 3.3 million barrel draw analysts polled by Thomson Reuters were expecting.

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Gasoline stocks surprisingly increased by 2.9 million barrels versus the expected draw of 1.7 million barrels. Gasoline demand can be a proxy for future crude oil demand as it is a product of crude oil refining. Peak gasoline demand season runs from Memorial Day to Labor Day in the U.S.

Of note, the EIA’s data indicated that gasoline demand is running behind last year. Over the last four weeks, gasoline demand is down 0.7% compared to a year ago.

According to AAA, the national average for gasoline prices was $2.865 per gallon on Wednesday. A year ago, the average price per gallon was $2.351.