Oil prices slumped earlier today, though an Energy Department report released this morning said that U.S. crude inventories dropped by 3.9 million barrels last week. Analysts surveyed by Platts had expected only a 1.7 million barrel decline.

Reserves fell to 357.7 million barrels, or 1.1%, for the week ended June 12.

Light, sweet crude for July delivery was down 12 cents to $70.35 in the afternoon on the New York Mercantile Exchange, though earlier in the day crude prices slipped into the $69 area.

Still, most chatter today centered on other news from the U.S. Energy Information Administration report saying that gasoline reserves swelled 1.7%.

The

Amex Oil Index

(XOI)

was down 1.8% by the afternoon, while the

Philadelphia Oil Service Index

( OSX) was off 2.8%.

Shares of

Exxon Mobil

(XOM) - Get Report

were changing hands in negative territory by the afternoon, off 50 cents at $71.13.

Sunoco

(SUN) - Get Report

and

Murphy Oil

(MUR) - Get Report

also joined Exxon Mobil in the red, down 3.3% and 2.2% respectively.

Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.