On rising inventories and falling demand for distillate fuels, crude oil prices dropped under $79 per barrel on Thursday in New York.

Crude inventories increased by 3 million barrels in the week ending Feb. 19, said the U. S. Energy Information Administration. At the same time, comparing four-week rolling averages, the EIA said distillate fuel demand had fallen 6.8 percent compared with the same period a year ago.

On Thursday crude oil prices shed $1.66 to hit $78.34 on the New York Mercantile Exchange. Heating oil prices lost 0.0493 cents to $1.9928 per gallon . Reformulated gasoline blendstock prices lost 0.0558 cents to $2.0431 per gallon. Henry Hub natural gas prices dropped 0.066 cents to $4.793 per million British thermal units.

AAA said that up from Wednesday's $2.678, the average national price for unleaded gasoline on the retail level was $2.693 per gallon Thursday. (With Input from Agencies)