Energy Prices End Mixed

Crude oil prices fall for the second day in a row but gasoline edges higher after supply report.
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Updated from 2:24 p.m. EDT

Crude oil prices fell for the second day in a row Wednesday, following a government report that offered a mixed picture on energy inventories in the most recent week.

The benchmark U.S. crude closed down 44 cents, or 1.1%, at $40.70. Gasoline was up a quarter of one cent, or 0.2%, to settle at $1.419 a gallon.

The price divergence reflected the Department of Energy's inventory report, which showed gasoline stocks fell 700,000 barrels in the week ended May 21, while the level of oil supply was basically flat. Both gasoline and crude prices fell in anticipation of the report Tuesday.

Energy prices have repeatedly hit record highs on the New York Mercantile Exchange in the past month, with traders worried about tight supplies.

Persistent worries about attacks on facilities in the oil-rich Persian Gulf ahead of the peak summer driving season have kept oil above $40 a barrel for most of the past two weeks.

Mexico yesterday joined Saudi Arabia, the world's top oil exporter, in saying it will increase production. The Saudis have pledged to increase production to 9.1 million barrels a day in June, up from the current level of 8.3 million barrels.

The kingdom also has urged other members of the Organization of Petroleum Exporting Countries to boost output by as much as 10% to prevent high oil prices from slowing global economic growth. The cartel, whose members already are producing some 2 million barrels a day above their official quotas, said it will make a decision at its regular meeting in Beirut next week.

Mexico, along with Norway and Russia, are among the world's biggest oil producers, but are not members of OPEC.