NEW YORK -- Oil futures ended a whipsaw session slightly lower yesterday. The expiration of options played havoc with prices, driving crude near record high levels at times and down by more than $3 a barrel at others.

Retail gas prices, meanwhile, advanced past $3.77 a gallon.

Options allow investors to bet whether oil prices will rise or fall, and prices can fluctuate widely on days that options expire.

The effect may be exacerbated at the moment, when prices at historic levels have drawn more investors to speculate in options, said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com.

Contributing to the volatility, the June crude-oil contract expires next week. Oil prices sometimes trade erratically as investors square positions ahead of a contract expiration.

Meanwhile, natural-gas prices tumbled yesterday after the Energy Department said inventories rose by 93 billion cubic feet last week, more than analysts had expected. That helped pull oil prices down from earlier highs, analysts said.

Light, sweet crude for June delivery fell 10 cents to settle at $124.12 a barrel on the New York Mercantile Exchange, after rising as high as $126.64 earlier in the session and falling as low as $120.75 later in the day. Oil prices reached a trading record of $126.98 a barrel on Tuesday.