NEW YORK (MarketWatch) -- Crude-oil futures erased earlier gains Thursday, falling for the first session in four as government data showed petroleum demand in the U.S. fell in the past week, pushing fuel inventories higher. The report also showed a bigger-than-expected drop in crude inventories, but the decline was caused by a 5% slump in imports. Also on the radar, the International Energy Agency raised its demand forecasts for 2009 and 2010 by nearly 500,000 barrels a day, and the Organization of Petroleum Exporting Countries kept its production quota unchanged. On the New York Mercantile Exchange, crude for October delivery slid 8 cents, or 0.1%, to $71.23 a barrel. It rose to $72.44 a barrel earlier, the highest level since Aug. 28. Crude futures have gained 5% in the previous three sessions. In a weekly update, the Energy Information Administration reported gasoline inventories rose 2.1 million barrels in the week ended Sept. 4, and distillate stockpiles, which include heating oil and diesel, rose 2 million barrels. Gasoline supplied, an implied gauge for gasoline consumption, fell 2.1% to 9.28 million barrels a day last week. Total petroleum products supplied fell 1% to 19.52 million barrels a day. The EIA data, came a day late this week because of the Labor Day holiday on Monday, also showed crude inventories fell 5.9 million barrels, as imports fell to 9.1 million barrels a day from 9.58 million. Analysts had expected an inventories drop of less than 2 million barrels. Inventories at Cushing, Okla., the delivery point for Nymex crude futures, rose 100,000 barrels to 31.3 million barrels. "The larger draw seen today was drawn by lower imports and will not be the norm, especially since OPEC is continuing to not abide by their quotas," said Tariq Zahir, managing member of Tyche Capital Advisors. "The primary driving forces in the energy market will be the continued weakness in the U.S. dollar." Late Wednesday, the American Petroleum Institute, a Washington-based industry group, reported that U.S. crude inventories declined 7.2 million barrels last week. The Energy Information Administration also released its weekly update on inventories of natural gas in storage. U.S. natural gas inventories rose 69 billion cubic feet in the week ended Sept. 4. Analysts surveyed by Platts had projected an addition of between 75 billion and 79 billion cubic feet. At 3,392 billion cubic feet, stocks were 495 billion cubic feet higher than last year at this time and 503 billion cubic feet above the five-year average. October natural gas was recently up 2.9% to $2.9 per million British thermal units. It was down more than 2% before the inventories data. Also in energy trading, October reformulated gasoline fell 1.3% to $1.805 a gallon and October heating oil edged down 0.6% to $1.7838 a gallon. The United States Oil Fund (USO 36.87, -0.07, -0.19%) gained 1%, and the United States Natural Gas Fund (UNG 10.53, +0.43, +4.26%) rallied 3.1%. In currencies, the dollar index (DXY 76.93, -0.16, -0.20%) slid 0.2% to 76.923. The IEA, an energy adviser to 28 developed countries, said global demand is now expected to average 84.4 million barrels a day in 2009 and 85.7 million barrels a day in 2010. Still, 2009 demand is expected to be 2.2% lower than it was last year. See related story. In other oil news, OPEC did as expected, deciding to keep its official output quota unchanged, but it also warned that the oil market remains oversupplied. See full story. The cartel, which accounts for about a third of the world's oil production, said last month that member countries raised production during July for a fourth month. UNG 10.52, +0.42, +4.19% 1412108 AS The group's compliance with mandated output cuts ticked below the 70% mark for the first month since January, according to a MarketWatch calculation. Read related story on oil market. In U.S. economic news, the number of people filing for state unemployment benefits for the first time fell 26,000 to a seasonally adjusted 550,000 last week, the lowest since mid-July, the Labor Department reported. See full story.

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