Oil prices rose Wednesday on news of a large drain in U.S. oil inventories and a slight improvement in economic growth in China.
Benchmark West Texas Intermediate crude for August delivery rose $1.24 to close at $101.20 a barrel on the New York Mercantile Exchange. On Tuesday, the Nymex contract dipped below US$100 per barrel for the first time since May.
Brent crude, a benchmark for international oils used by many U.S. refineries, fell 17 cents to US$105.85 on the ICE exchange in London on the last day for the August contract. Brent crude for September delivery rose 29 cents to close at US$107.17 a barrel.
Oil's gains were driven by a drop in U.S. crude inventories that was more than double what analysts had expected. The Energy Department reported Wednesday US crude stocks fell by 7.5 million barrels for the week ended July 11. Analysts had expected a drop of three million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
The decline in supplies was largely the result of more refinery activity. That increased supplies of fuels, and sent some of those prices falling. Demand for both gasoline and diesel are down compared with the same period last year, the Energy Department said.
But demand could be rising in China, the world's biggest oil importer. The Chinese government reported Wednesday the nation's economic growth rose to 7.5 per cent in the April-June quarter from 7.4 per cent in the first quarter, suggesting that the government's mini-stimulus measures had a positive effect.
In other Nymex trading, wholesale gasoline fell 1.6 cents to close at US$2.883 a U.S. gallon (3.79 litres), heating oil rose 0.2 of a cent to close at US$2.858 a gallon and natural gas rose 2.2 cents to close at US$4.119 per 1,000 cubic feet.
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