May 15. In global petroleum market news, WTI crude oil futures fell for a second day in New York as an Energy Department report showed a larger-than-expected build in distillates and reassurances that Iran will not cut production. Light, sweet crude for June delivery dipped USD 1.58 to settle at USD 124.22 a barrel Wednesday on NYMEX. London Brent crude, whose front month June contract expires today, was down 32 cents at USD 121.54. The EIA report said crude inventories rose by 200,000 barrels last week, less than the 2.5 mn barrel jump according to the consensus figure. But the report also said gasoline demand fell slightly over the last four weeks, and that inventories of distillates, which include heating oil and diesel fuel, rose by 1.4 mn barrels last week, i.e. 27% more than expected. Furthermore, the EIA said gasoline supplies fell by 1.7 mn barrels last week, while the consensus figure had been calling for decline of only 800,000 barrels. Also pressuring oil prices Wednesday was the dollar, which continued to firm up against the euro. Oil prices and dollar moves have grown closely intertwined over the past few months, with investors piling into oil and other commodities as a hedge against the falling dollar. Oil futures hit a trading record of USD 126.98 a barrel on Tuesday. WTI prices may be more volatile in coming days as investors square positions ahead of the June contract's expiration next week. On the utilization side, U.S. refineries operated at 86.6% of their capacity last week, up 1.6% from the week before, the highest since the week ended January 11, the department said. The consensus forecast had projected a 0.7% increase. Also helping to cap prices, a senior Iranian official said on Wednesday Iran had no plans to cut exports to world markets. On Tuesday, Iranian President Mahmoud Ahmadinejad was quoted as saying a proposal to reduce the country's output was on the table. Looking forward, we could see oil prices remain in mild correction mode until the inevitable pickup in gasoline demand kicks in around the Memorial Day holiday, despite reports that as many as two-thirds of Americans planning road trips this summer are either altering their plans to shorten their trips or canceling altogether due to soaring gasoline prices. Be that as it may, we still expect to see WTI and Brent reach USD 130 mark by the peak driving season.