NEW YORK - OIL prices fell on Wednesday after government data showed an increase in US gasoline inventories ahead of the July 4 Independence Day holiday, traditionally the peak of the summer driving season.

Gasoline stockpiles in the world's top consumer rose by 2.3 million barrels last week, above analysts forecasts, data from the US Energy Information Administration showed.

Distillate inventories, including diesel, increased by 2.9 million barrels, while crude stockpiles fell by 3.7 million barrels.

US crude settled US$0.58 (S$0.84) lower at US$69.31 a barrel, after rising as high as US$71.85. London Brent crude fell 51 cents to settle at US$68.79 a barrel.

'The fact that gasoline stocks are up 2.3 million barrels ahead of the Fourth of July weekend is huge,' Stephen Schork, editor of The Schork Report, said, adding 'Demand is low.' -- REUTERS