NEW YORK - Oil futures are down after the government reported that U.S. crude supplies grew more than expected last week. The news alleviated some of the market's recent concerns about tight supplies.

Gasoline futures, meanwhile, are slightly higher after spiking to a record soon after the Energy Department said gas supplies fell last week.

Light, sweet crude for June delivery is down 70 cents at US$117.38 a barrel on the New York Mercantile Exchange. May gasoline futures are up 0.29 cent at $3.0193 a gallon after reaching a new trading high of $3.0277.

Separately, AAA and the Oil Price Information Service said gas prices at the pump rose 2.2 cents overnight to a new record of $3.533 a gallon -- about 92.9 cents US a litre.

In Canada, the average retail price for unleaded gasoline was just over C$1.23 a litre, according to GasBuddy.com, a website that monitors North American pump prices.

"The bulls are certainly in control of the oil market right now,'' said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "The dollar continues to face a lot of pressure, it is likely to further weaken and that will continue to underpin prices.''

Many analysts expect the Federal Reserve to cut interest rates further this year to try to shore up the ailing U.S. economy, a move that would likely further weaken the dollar.

Oil is now nearly double its closing price a year ago, and up 24 percent in 2008.

Supply constraints are also supporting prices. A Royal Dutch Shell PLC joint venture declared what's known as force majeure on April and May oil delivery contracts from a 400,000-barrel-a-day Nigerian oil field due to a pipeline attack last week. The move protects the company from litigation if it fails to deliver on contractual obligations to buyers.

In Mexico, oil production slipped 7.8 per cent in the first quarter to 2.91 million barrels a day as output at the country's oil fields waned, state oil company Petroleos Mexicanos said. In Scotland, workers at Ineos PLC's 196,000 barrel-a-day Grangemouth refinery and petrochemical plant threatened to strike over changes to an employee pension plan.

At the same time, global oil demand is expected to rise about 1.3 million barrels a day this year to 87.2 million barrels a day, according to the International Energy Agency. China imported a record 4.09 million barrels a day of crude oil last month, final data from its General Administration of Customs showed Tuesday.

"Even though U.S. demand is showing signs of decline, China is going very strong,'' Shum said.

A major conference of the world's largest oil consumers and producers ended Tuesday with a measured statement about the risks of oil prices. The International Energy Forum, after meeting in Rome this week, said in a statement that "oil prices should be at levels that are acceptable to producers and consumers to ensure global economic growth, particularly in developing countries.''