An unexpectedly large drop in U.S. crude oil inventories pushed the price of oil higher on Wednesday.
Benchmark oil rose 90 cents to finish at $94.33 per barrel Wednesday in New York, its highest level since mid-May. The Energy Department said stockpiles fell 3.7 million barrels last week to 366.2 million barrels. Analysts had predicted a decline of 1.5 million barrels, according to Platts, the energy information arm of McGraw-Hill.
It marked the third consecutive large weekly decrease in oil supplies. Still, analysts point to production problems and seasonal factors more than increased demand for the declines. But with supplies still above normal for this time of year, any decrease tends to cause a rise in oil prices.
Oil production has been affected by a number of issues this month, including some refinery and pipeline problems in the Midwest and California. Tropical storms have moved through the Gulf of Mexico, closing some oil rigs and slowing oil tankers destined for U.S. ports.
In addition, refiners are selling off inventories to avoid a surplus when they switch to processing winter blends of fuel next month.
"The bigger question is, are these numbers sustainable once these refiners start to come back on line?" Price Futures Group oil analyst Phil Flynn asked.
Brent crude, which is used to price international varieties of oil, gained $2.22 to end at $116.25 per barrel in London. The Brent contract expires on Thursday. Prices sometimes can be volatile the closer a contract gets to expiration.
Brent is up more than $13 per barrel this month on concerns about production outages in the North Sea. It's also influenced more by developments in the Middle East. Saudi Arabia, the world's biggest oil exporter, on Wednesday ordered its citizens to leave Lebanon over kidnapping fears.
In the U.S., the national average for gasoline rose less than a penny overnight to $3.709 per gallon, according to AAA, Wright Express and the Oil Price Information Service. That's about 31 cents more than a month ago and nearly 12 cents more than a year ago.
Other futures prices on the New York Mercantile Exchange:
- Heating oil rose 5.06 cents to end at $3.0852 per gallon.
- Gasoline increased 8.26 cents to finish $3.084 per gallon.
- Natural gas fell 8.6 cents, or 3 percent, to end at $2.748 per 1,000 cubic feet.