Oil prices surge as US inventories slump

Oil prices went up Wednesday as U. S. oil supplies fell more than expected last week. New York oil price advanced almost 3 percent to a 15-month high after U.S. supplies tumbled for a second week as refinery operating rates gained. Light, sweet crude for August delivery gained 2.99 U.S. dollars, to settle at 106.52 dollars a barrel on the New York Mercantile Exchange. Brent for August delivery went up 0.7 dollars, to close at 108. 51 dollars a barrel. On Wednesday, U.S. Energy Information Administration (EIA) said crude supplies fell significantly last week. U.S. crude inventories shrank 9.87 million barrels to 373.9 million barrels for the week ended July 5. Analysts expected a drop of 3.8 million barrels. Gasoline supplies declined 2.6 million barrels to 221 million barrels. Analysts expected a gain of 1.2 million barrels. The EIA report also showed that U.S. refineries operated at 92.4 percent of the total capacity. U.S. oil supplies have dropped 20.2 million barrels in the past two weeks. Traders believed this signaled a major pickup of the energy demand in the world's biggest consumer. Separately, the Vienna-based Organization of Petroleum Exporting Countries (OPEC) predicted that global crude demand will increase at a faster rate in 2014. OPEC said in its monthly report that world oil demand growth for 2013 now stands at around 0.8 million barrels/day (mb/d), following a marginal downward revision. In 2014, world oil demand is projected to grow at a higher rate of 1.0 mb/d to average 90.7 mb/d, which represents an around 0.3 mb/d rise from the growth predicted for the current year, according to the oil exporting cartel.