WASHINGTON (dpa-AFX) - Oil prices rose sharply on Wednesday amid concerns about possible supply disruptions due to rising tensions in the Middle East, and on data showing a larger than expected drop in U.S. crude inventories in the week ended July 26th.
On the geopolitical front, Israel said it has killed a top Hezbollah commander after carrying out a strike on a southern suburb of the Lebanese capital Beirut. According to reports, Iran Supreme Leader Ayatollah Ali Khamenei vowed to take revenge for the attack, a step that could lead to a wider Middle East war and affect Persian Gulf oil supplies.
West Texas Intermediate Crude oil futures for September ended up $3.18 or about 4.3% at $77.91 a barrel.
Brent crude futures were up $3.00 or 3.84% at $81.07 a barrel a little while ago.
Data released by the Energy Information Administration (EIA) showed crude oil inventories slumped by 3.4 million barrels last week after tumbling by 3.7 million barrels in the previous week. Economists had expected crude oil inventories to dip by 1.6 million barrels.
At 433.0 million barrels, U.S. crude oil inventories are about 4 percent below the five-year average for this time of year, the EIA said.
The EIA data also said gasoline inventories also decreased by 3.7 million barrels from last week and are about 3 percent below the five-year average for this time of year.
Meanwhile, distillate fuel inventories, which include heating oil and diesel, increased by 1.5 million barrels last week but are about 7 percent below the five-year average for this time of year.
The American Petroleum Institute (API) reported on Tuesday that U.S. crude inventories fell by 4.495 million barrels in the week to July 26, marking the fifth consecutive week of inventory declines as a result of robust summer travel demand.
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