CHRIS KAHN

The Associated Press

NEW YORK (AP) - Oil prices fell below $65 a barrel Wednesday with more signs emerging that consumers are cutting back where they can, notably on energy costs.

Benchmark crude for September delivery lost $2.88 to $64.35 a barrel on the New York Mercantile Exchange. In London, Brent prices fell $1.66 to $68.22 a barrel on the ICE Futures exchange.

The summer driving season has been a bust for industries that rely heavily on summer travel because Americans are staying very close to home.

Consumers confidence has been rattled, even though there are indications of improvement in some areas like housing.

On Wednesday the government reported that orders to U.S. factories for big-ticket durable goods plunged in June by 2.5 percent, the largest amount in five months. The figure was much larger than the 0.6 percent decline economists had expected and was the biggest setback since a 7.8 percent fall in January.

Early in the recession, consumer began cutting back on energy costs and that has continued throughout the year.

The Energy Information Administration reported Wednesday that crude supplies in the U.S. grew by 5.1 million barrels. That's about 18 percent above last year's levels, showing how much unwanted crude is in storage.

While Federal Highway Administration recently reported that demand edged upward slightly for gasoline, given that gas is so much cheaper than last year the shift in behavior by motorists this summer is clear.

Gasoline supplies have risen by 13.7 million barrels over the past six weeks.

Still, refiners are cutting back to match falling demand.

At the pump, gas prices have climbed for a week, adding less than a penny overnight to a new national average of $2.511 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. Regular unleaded gas peaked in June, and a gallon is 12.8 cents cheaper than the same time last month. It's also $1.43 cheaper than the same time last year.

In other Nymex trading, gasoline for August delivery fell 3.26 cents to $1.878 a gallon and heating oil lost 3.22 cents to $1.7325 a gallon. Natural gas for August delivery slid 6 cents to $3.475 per 1,000 cubic feet.

Associated Press writers George Jahn in Vienna and Alex Kennedy in Singapore contributed to this report.