Crude oil rises to US$104 a barrel as report shows large drop in U.S. supplies

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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 West Texas Intermediate crude for July delivery gained $1.74 to close at US$104.07 a barrel on the New York Mercantile Exchange. Oil now is up four per cent for the month of May.

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

A report from the U.S. 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 other energy futures trading on the Nymex, wholesale gasoline gained three cents to US$2.99 a U.S. gallon (3.79 litres), heating oil was flat at US$2.95 a gallon and natural gas fell eight cents to US$4.47 per 1,000 cubic feet.

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