Energy futures seek direction after hitting new records

Investors who initially bought frenetically on news that gasoline supplies had fallen more than expected last week turned around and began selling when they realized the country's appetite for increasingly expensive gas is declining.

The Energy Department's Energy Information Administration said inventories of gas fell by 5.5 million barrels, much more than analysts surveyed by Dow Jones Newswires had expected. But as they read deeper into the report, they found that gas demand has fallen an average of 1 percent each of the last four weeks compared to the same period last year.

Prices were also pressured by the EIA's report that inventories of distillates, which include heating oil and diesel, unexpectedly rose last week by about 100,000 barrels. Analysts had expected a sharp decline.

Light, sweet crude for May delivery fell $1.16 to $112.63 a barrel on the New York Mercantile Exchange by midday after rising to a trading record of $114.95 shortly after the EIA report was issued. The report said crude inventories fell by 2.3 million barrels last week, compared to the gain analysts expected.

Gasoline futures were fluctuating; the May contract fell 0.12 cent to $2.8798 a gallon on the Nymex after earlier rising to a trading record of $2.933. May heating oil futures fell 4.87 to $3.2252 a gallon.