Jul 2 03:26 PM US/Eastern
By ADAM SCHRECK / AP Business Writer

Bush Again Calls for Domestic Oil Drilling

NEW YORK (AP) - Oil prices shot to new records above $144 a barrel Wednesday as the government reported a bigger-than-expected drop in U.S. supplies and the threat of conflict with Iran weighed on traders' minds.

Light, sweet crude for August delivery rose as high as $144.13 on the New York Mercantile Exchange shortly after the market closed. The contract also notched a new closing record, settling at $143.57—a full $2.60 above the previous high from a day earlier.

The Energy Department's Energy Information Administration said crude oil supplies fell by 2 million barrels last week, or about 800,000 barrels more than analysts surveyed by the energy research firm Platts predicted.

However, that same report offered a mixed picture of energy use by the world's thirstiest oil consumer. Gasoline supplies unexpectedly grew by a considerable amount, and demand continued to slide—suggesting that record fuel prices are prompting a real shift in Americans' driving habits.