Recently, oil prices rose over $123 a barrel in Asia on reports of an explosion at a Kuwaiti petrochemical plant. The effect was that overnight, the Nymex crude for July delivery lost $2 on worries about declining demand in the U.S. and abroad. Meanwhile, gasoline inventories rose by 2.9 million barrels last week, more than three times the increase analysts polled by energy research firm Platts had expected.

Concerns about demand have helped pull oil down nearly 10 percent from its May 22 high of $135.09. Many investors believe subsidy cuts will choke off demand for fuel in the developing world. India announced increases that, for example, would boost gasoline prices in New Delhi by 11 percent. Malaysia said it would hike gasoline prices by 41 percent and electricity for commercial and industrial users by 26 percent.

Late afternoon in Singapore, light, sweet crude for July delivery was up 62 cents at $122.92 barrel in electronic trade on the Nymex. The contract rose as high as $123.25 earlier during Asian trade; it fell $2.01 in Wednesday’s floor session to $122.30 a barrel.

Many analysts have long questioned whether high oil prices could be sustained; many blame speculative investing fueled by the falling dollar for a near doubling of crude prices over the past year. A stronger dollar also makes oil more expensive to buyers dealing in other currencies.