NEW YORK (AP) -- Gasoline futures extended their rally Friday, raising the prospect that prices at the pump will reverse course and again head higher in the coming weeks. Oil futures moved above $68 a barrel.

Retail gasoline prices, which typically lag the futures market, fell again by 1.4 cents overnight to a national average price of $3.029 a gallon, according to AAA and the Oil Price Information Service. Prices peaked at $3.227 a gallon on May 24.

"Unfortunately, I think this is about as good as it gets," said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service.

That's because gasoline futures have risen sharply in the wake of a government report on Wednesday that shocked traders by showing gasoline inventories remained flat as refineries used less of their capacity than they had the week before.

Also boosting prices on Friday was a lower-than-expected core inflation figure, which encouraged investors to move money from fixed income investments to commodities.

Gasoline for July jumped 4.42 cents to $2.2689 a gallon on the New York Mercantile Exchange. Light, sweet crude rose 52 cents to $68.17 a barrel in midday trading. Brent crude for August delivery rose 29 cents to $74.12 a barrel on London's ICE Futures exchange.

Also on the Nymex, heating oil futures rose less than a penny to $2.02 a gallon while natural gas prices added 17.1 cents to $7.979 per 1,000 cubic feet.

Analysts said traders continued to react to Wednesday's report by the Energy Department's Energy Information Administration.

"The report we got this week ... that was just incredibly disappointing and extremely bullish," said James Cordier, president of Liberty Trading Group, in Tampa, Fla.

The report showed that refinery utilization, which had been expected to grow by 0.8 percent, fell 0.4 percent to 89.2 percent, the second straight weekly decline, in the week ended June 8. Most analysts say refineries should be using 94 percent to 95 percent of their capacity at this time of year.

The report also showed gasoline inventories unchanged at 201.5 million barrels last week. Analysts surveyed by Dow Jones Newswires had expected inventories to rise by 2 million barrels.

The report killed any sentiment that the domestic refining industry, beset by an unusual number of outages this spring, has recovered. Analysts have warned for months that the industry is not producing enough gasoline to meet summer driving demand, which typically peaks between the July 4 and Labor Day holidays.

"The thing about those numbers is everybody knew that they (were) going to be struggling to keep up with gasoline demand as it was ... but they didn't seem to make any progress refining-wise," said Tobin Gorey, a commodity strategist with the Commonwealth Bank of Australia in Sydney.

On Friday there were new reports that Corpus Christi, Texas, refineries owned by Valero Energy Corp. and Flint Hills Resources were temporarily shutting down equipment for maintenance.

"We needed some big builds (in gas inventories)," said Cordier. "We got one or two big builds, then this figure just threw cold water on it."

The report attracted hedge funds and technical buying, analysts said, further adding to the price increases. Before Thursday, crude oil had not settled above $67 a barrel since September.

"We're going to probably rally until we see another figure next week," Cordier said.

However, Kloza doubts the rally will continue much longer. He thinks futures will trade in a defined range of a few dollars for oil, and 10 to 20 cents for gasoline, rather than breaking out to new highs.

"I do not believe this is the beginning of another tremendous bounce," Kloza said.

Retail gas will follow suit, he said: It won't fall any further, but it also won't jump back to late May's records.

Cordier said energy futures prices are also being supported by Friday's core inflation figure, which a government report said rose a lower-than-expected 0.1 percent. That dampened sentiment the Federal Reserve will raise interest rates. Investors flee equity and commodities markets for fixed income investments when interest rates are believed to be on their way up, Cordier explained. When investors think rates will hold steady or fall, they're more likely to invest in commodities, he said.

"It relieves downward pressure on commodities," Cordier said. "The core figure on inflation today kind of took the cap off the market."

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By John Wilen, AP Business Writer