DENVER (AP) — Crude futures retreated for a second consecutive day as the government released more disheartening economic data and another report suggesting further erosion in energy demand.

Light, sweet crude for February delivery fell 93 cents to $41.52 a barrel on the New York Mercantile Exchange. On Wednesday, prices tumbled more than 12 percent in the largest single-day percentage decline since September 2001.

A sharp decline in energy spending was outlined in a weekly report of natural gas storage levels last week, which fell less than expected.

Inventories held in underground storage in the lower 48 states fell by 47 billion cubic feet to about 2.83 trillion cubic feet, according to the Energy Information Administration.

Analysts had expected a drop of between 78 billion to 83 billion cubic feet, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

After the report, natural gas for February delivery fell nearly five percent.

The natural gas figures were released a day after EIA said inventories of commercial crude rose 6.7 million barrels, much higher than the 1.5 million-barrel build expected by analysts.

Crude has become so cheap, traders who are taking delivery have begun storing it at sea to sell at a later date.

"Demand is going to be lower than expected and we still have a lot of oil out there in tanks and storage," said Michael Lynch, president of Strategic Energy & Economic Research Inc. "Inventories are high in terms of barrels but when you think of the fact that demand is down they're very high."

Analyst Phil Flynn of Alaron Trading Corp. believes oil prices could drop below $35 a barrel again, as they did last month, before rebounding.

"Right now our oil supplies are more than ample. I mean, you can almost say that we have an oil glut right now," he said. "The only thing that I think is going to get prices up sustainably for the long run is a big improvement in the economy."

Yet almost every time a new spate of economic data is released, it points to a long and painful downturn. Yesterday, president-elect Barack Obama said the recession could "linger for years" unless Congress pumps unprecedented sums from Washington into the economy.

Energy prices mirrored a drop on Wall Street as investors pulled back after seeing how many people continue to seek unemployment benefits and more bad news from retailers.

The Labor Department said 4.61 million people continued to seek jobless benefits, up 101,000. That exceeded analysts' expectations of 4.5 million and was the highest level since November 1982, when the nation was emerging from a steep recession, though the labor force has grown by about half since then.

Even as crude prices drop, US motorists may have seen the last of $1.70 gasoline at least through the summer, Oil Price Information Service analyst Tom Kloza said.

The retail price has risen from $1.61 a gallon on December 30 to $1.76 a gallon as of yesterday, according to auto club AAA, the Oil Price Information Service and Wright Express. Overnight, gas prices rose 3.5 cents.

A combination of factors has triggered the climb, including a jump in wholesale gasoline prices paid by retailers and passed on to consumers. The period from President's Day to Memorial Day typically brings higher prices.