US oil prices soar as inventories fall

U.S. oil prices surged Wednesday after an official report showed U.S. crude oil inventories plunged. U.S. crude inventories dropped 1.8 million barrels to 397.6 million barrels for the week ended May 2, said the Energy Information Administration (EIA), the statistics arm of the U.S. Department of Energy, Wednesday. As the summer driving season gets closer, analysts believed that the sharp drop in crude inventories suggests the demand for oil was stronger than expected. Crude markets were also supported by the Federal Reserve Chair Janet Yellen's generally dovish testimony in Congress. The Fed expected considerable time before normalizing the rate policy, and most Fed officials expect to normalize the rate policy in 2015 or 2016, Yellen said before the joint economic committee of Congress. The U.S. central bank announced a further cut in monthly bond purchases at its April policy meeting, by another 10 billion U.S. dollars to 45 billion dollars starting in May, while reaffirming that a highly accommodative stance of monetary policy remains appropriate. Light, sweet crude for June delivery moved up 1.27 dollars to settle at 100.77 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for June delivery gained 1.07 dollars to close at 108.13 dollars a barrel.