It Is High Time for Oil Prices to Fall Down: U.S. Consumers Are Turning to Motorscooters, Bicycles and Other Means of Transportation

Oil prices fell below $122 a barrel on Wednesday, extending their recent decline on expectations that this year's surge in energy costs is undermining U.S. gasoline demand.

The modest, but continued strengthening of the U.S. dollar also helped push down oil prices.

By midafternoon in Europe, light, sweet crude for September delivery had shed 79 cents to $121.40 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $2.54 to settle at $122.19 a barrel on Tuesday.

Investors expect more evidence of falling gasoline consumption when the U.S. Energy Department's Energy Information Administration releases its weekly oil inventory report later Wednesday, said Mark Pervan, a senior commodities strategist with ANZ Bank in Melbourne.

"People are looking closely at the deteriorating demand for petrol," Pervan said. "The market will probably fence-sit ... ahead of the DOE numbers."

Gasoline stocks were expected to rise 400,000 barrels in the petroleum supply report, according to the average of analysts' estimates in a survey by energy research firm Platts.