NEW YORK (CNNMoney.com) -- Oil prices fell Wednesday as traders looked past the Federal Reserve's latest policy statement to focus on signs that energy demand remains weak.
What prices are doing: Light sweet crude for March delivery was down $1.04 to $73.66 a barrel.
What's moving the market: The retreat came despite a government report that showed the nation's supplies of crude oil unexpectedly fell last week.
The Energy Information Administration said U.S. crude stocks fell by 3.9 billion barrels in the week ended Jan. 22. Analyst surveyed by research firm Platts had expected an increase of 2 million barrels.
Gasoline supplies rose by 2 million barrels. Distillates, used to make heating fuel, were up by 400,000 barrels.
Analysts were expecting gasoline stocks to have risen by 1.7 million barrels. Distillates were seen falling by 1.8 million barrels.
But the report also showed that U.S. imports of crude oil and refinery activity both fell last week, highlighting fears about sluggish energy demand.
"The inventory numbers were pretty bearish," said Tom Pawlicki, an oil industry analyst at MF Global in Chicago. "Demand is still lingering at weak levels."
Traders shrugged off the Federal Reserve's decision to hold interest rates steady near zero percent.
Meanwhile, the dollar firmed against the euro and the yen but remained weak against the U.K. pound.
The dollar has recovered significant ground over the last few weeks, with the dollar index climbing 0.3% to 78.63. That's up from a low near 74 in early December.
"We have an extremely robust U.S. dollar," said James Cordier, president of Liberty Trading Group. "I think that is pushing many markets down right now."
In addition to the stronger dollar, Cordier said the oil market "faces a lot of cross winds." Among the main concerns are signs that China will move to cool its robust economy, possible credit downgrades of major economies and reports that OPEC nations are not adhering to production quotas, he said.
"The bullish case is very hard to find in the oil market," he said.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.80%||3.88%|
|15 yr fixed||3.20%||3.23%|
|30 yr refi||3.82%||3.93%|
|15 yr refi||3.20%||3.23%|
Today's featured rates:
|Ford Motor Co||8.29||0.05||0.61%|
|Advanced Micro Devic...||54.59||0.70||1.30%|
|Cisco Systems Inc||47.49||-2.44||-4.89%|
|General Electric Co||13.00||-0.16||-1.22%|
|Kraft Heinz Co||27.84||-2.20||-7.32%|
Bankrupt toy retailer tells bankruptcy court it is looking at possibly reviving the Toys 'R' Us and Babies 'R' Us brands. More
Land O'Lakes CEO Beth Ford charts her career path, from her first job to becoming the first openly gay CEO at a Fortune 500 company in an interview with CNN's Boss Files. More
Honda and General Motors are creating a new generation of fully autonomous vehicles. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
Whether you hedge inflation or look for a return that outpaces inflation, here's how to prepare. More