Oil climbs to $104 as US supplies drop sharply

Crude oil rises to $104 a barrel as report shows large drop in US supplies on fewer imports

Associated Press

The price of oil climbed to a one-month high Wednesday after a report showed a large drop in U.S. crude supplies, helped by a decline in imports.

Benchmark U.S. crude for July delivery gained $1.74 to close at $104.07 a barrel on the New York Mercantile Exchange. Oil has now gained 4 percent for the month of May.

Brent crude, a benchmark for international oil, added 86 cents to $110.55 a barrel on the ICE Futures exchange in London.

A report from the Energy Department showed a drop of 7.2 million barrels in U.S. crude oil supplies for the week ended May 16, compared with an expectation of a decline of 300,000 barrels by analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos.

Imports fell by 658,000 barrels.

Oil prices were also supported by political instability in Libya, usually a key supplier to European refineries, and the conflict in eastern Ukraine between the government and pro-Russia separatists ahead of presidential elections on Sunday.

In the U.S., the average price for a gallon of gasoline held steady at $3.64. The average is 3 cents lower than a month ago and a penny less that it was at this time last year.

In other energy futures trading in New York:

— Wholesale gasoline gained 3 cents to $2.99 a gallon.

— Natural gas fell 8 cents to $4.47 per 1,000 cubic feet.

— Heating oil was flat at to $2.95 a gallon.

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