NEW YORK (CNNMoney.com) - Oil prices fell Wednesday after a government report said gasoline supplies fell less than forecasters had expected.

U.S. light crude for June delivery lost 95 cents to settle at $71.93 a barrel on the New York Mercantile Exchange. Crude traded down 18 cents a barrel just prior to the report.

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In its weekly stockpile report, the Energy Information Administration said closely watched gasoline stocks fell by 1.9 million barrels, while diesel and heating fuel component distillates rose by 1 million barrels. Analysts were looking for a 2.6 million barrel drop in gasoline supplies and a 1.5 million barrel decline in distillates, according to Reuters.

Supplies of crude oil fell by 200,000 barrels. Analysts were looking for a 100,000 barrel decline.

Helping push down prices of oil was an increase in production at refineries - refinery runs were up 2.3 percent. Analysts were looking for a 1 percent rise. "It's a sign that soon gasoline supplies, which have been on the decline, are on the way up," said Phil Flynn, an analyst at Alaron Trading in Chicago. "That's taken some of the bullishness out of the equation."

Flynn also said no major geopolitical news for the last couple of days was helping keep a lid on prices.

But supporting prices was signs of increased demand. EIA said gasoline use increased 0.3 percent on average over that last four weeks compared to the same time last year.

Analysts have long pointed to rising demand and supply fears as the main reason for oil's surging price.

Gasoline supplies and refining capacity have been closely watched over the last few months as a switch in blends right before the summer driving season has caused fears of a shortage and, along with soaring crude costs, helped push prices to near record levels.

The average price for a gallon of regular gas rose another cent Wednesday to $2.92 a gallon, according to AAA. Gasoline prices have risen 17 percent over the last month and are near their all-time high of $3.06 a gallon reached just after Hurricane Katrina.

President Bush's call Tuesday for an investigation into possible market manipulation by oil companies, and easing of emissions laws and a halt to filling the Strategic Petroleum Reserve did little to ease prices as analyst said none of the moves will matter much.

Oil has been hitting record highs in recent sessions, unadjusted for inflation, on supply worries fed by fears of a confrontation with Iran, the world's fourth-biggest producer. But it's also within sight of inflation-adjusted highs of around $80 a barrel set in the late 1970s and early 1980s following the gas crisis and the Iranian revolution.

Iran will come into focus again Friday, when nuclear regulators present a report to the U.N Security Council on whether the country has halted production of uranium, which it has been ordered to do. Few expect it to have done so.

The situation in Nigeria is also pushing up prices, as nearly one quarter of the country's high-quality crude is shut in due to tensions with militants, who operate in an oil-rich but impoverished area of the country and want more control over how the country's oil wealth is dispensed.

Reuters reports that Exxon Mobil (Research) boosted security at its 420,000-bpd Qua Iboe oil export terminal in Nigeria. The news will do little to calm investors as the country's oil is prized for its high quality.

Although political disputes have always been in the news, analysts say they have a greater impact on prices now that OPEC is pumping at full capacity and is unable to offset any supply disruption.

And although politics is often in the headlines, it's only partly responsible for oil's surge.

Crude prices have gained 15 percent since the start of the year and more than tripled since the beginning of 2002.

Big fund money, faced with low global interest rates and a lackluster U.S. stock market in 2005, have helped fuel the rise as they chase returns in all types of commodities, including oil.

And fundamental supply and demand has also played a big part as discoveries of new, easily recoverable supplies have failed to keep pace with ever rising demand from the U.S. and developing countries like China and India.

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