Updated from 12:34 p.m. EST

Oil futures retreated Thursday after closing at their highest price in more than 13 years yesterday.

Recently, the April futures contract was down 38 cents, or 1%, to $37.80 a barrel, having reached $38.18 on the New York Mercantile Exchange, a cost not seen since Oct. 16, 1990, after Iraq had invased Kuwait.

Prices rallied Wednesday after the U.S. Energy Department announced that gasoline inventories were down 800,000 barrels, to 199.6 million, the lowest since November, while demand topped previous highs at 9 million barrels a day. While the numbers have an impact, Robert Brusca, chief economist at Fact and Opinion Research in New York, said perception is often the most important thing to change when oil prices rise.

"Oil is about driving -- driving your car, driving the economy, driving the political elections," he said.

While OPEC has kept supplies tight in recent months, keeping prices above $35 a barrel, higher crude prices are likely due to consumer spending, he said.

"People don't react to high energy prices by driving less or heating their homes less -- they just suck it up and pay for it," he said. "What it does it takes away from other items in the budget."

Sustained high prices might cut consumer spending, which is seen as a critical factor in the economic recovery, and they may also drive up prices for goods and services provided by big fuel users, such as airlines, which are already complaining about the problem.

The last time energy prices rose, firms were able to pass it on to the consumer in the form of surcharges, which boosted their profits. This time, he said, the immediate effect is unclear, but the consumer will bear the burden.

"I drive a fairly small car, and I spent over $20 to fill the gas tank for the first time in a fairly long time," he said.