Oil rallies on slump in US crude stocks

World oil prices soared on Wednesday following news of tumbling crude reserves in top consumer the United States. The US benchmark, West Texas Intermediate (WTI) for delivery in July, jumped to a one-month high at $ 104.29 per barrel. Brent North Sea crude for July leapt to $ 110.73 a barrel, touching a level last seen in early March. The US government’s Department of Energy revealed American crude oil inventories plunged 7.2 million barrels in the week to May 16. That shocked traders because market expectations had been for a weekly gain of 700,000 barrels, according to analysts polled by Dow Jones Newswires. A drop in the stockpiles typically indicates stronger demand in the world’s top crude consumer, putting upward pressure on global prices. ‘WTI has rallied after a decrease in crude inventories suggested demand for US oil last week was higher than expected,’ said Fawad Razaqzada at trading site Forex.com. However, industry trade body the American Petroleum Institute said Wednesday that US crude stocks fell by 10.3 million barrel last week, citing its own survey, according to AFP.