Oil down as weak demand outweighs Georgia conflict

Oil prices fell about a dollar Thursday, pulling back from the previous day’s rally as waning U.S. demand for energy overshadowed supply threats from the conflict in Georgia.

Crude fell as low as $112.59 a barrel before settling at $115.01 as traders continued to ponder Wednesday’s U.S. Energy Department report on weekly fuel inventories.

The department’s Energy Information Administration reported a bigger-than-expected drop in gasoline supplies but also said U.S. demand for refined fuel products continues to fall as American grapple with amost $4-a-gallon gasoline. The data seemed to confirm oil market analysts’ beliefs that Americans are still cutting back on their driving despite slightly lower pump prices.