US oil prices rise following bullish inventory report

Oil prices shot back above $100 a barrel in New York after a US petroleum inventory report showed a big drop in crude stocks and higher refinery activity levels. US benchmark West Texas Intermediate for August delivery gained $1.25 to close at $101.20 a barrel on the New York Mercantile Exchange. WTI on Tuesday had closed below $100 for the first time in two months. European benchmark Brent oil for delivery in August fell 17 cents to $105.85 a barrel in London. US commercial oil stocks fell 7.5 million for the week ending July 11, the US Energy Information Administration said in an inventory report. That was far above the 2.6m drop projected by analysts. Andy Lipow, head of consultancy of Lipow Oil Associates in Houston, pointed to a rise in refinery utilisation which means plants are using more crude to increase gasoline production to keep up with the summer driving season in the US. Refinery utilisation levels reached full capacity in the Midwest and rose nationally from 91.6 per cent a week ago to 93.8 per cent. The report also showed crude inventories fell 600,000 barrels in Cushing, Oklahoma, a closely-watched trading hub, according to AFP.