Crude-oil prices rallied Wednesday after government data showed shrinking inventories of oil and gasoline last week amid rising demand and falling imports.
Energy futures have been propped up in recent months by strong global demand and geopolitical worries such as violence in Nigeria, the war in Iraq and Iran's diplomatic showdown with the West over its nuclear program.
Light sweet crude for August delivery rose 68 cents to $72.20 a barrel on the New York Mercantile Exchange.
In its weekly petroleum report, the Energy Department said commercial inventories of crude oil declined last week by 3.4 million barrels to 343.7 million barrels, or 4 percent above year ago levels. Supplies of gasoline shrank by 1 million barrels to 212.4 million barrels, or 2 percent below year ago levels.
Over the past four weeks, daily gasoline demand was up 0.9 percent at 9.4 million barrels a day.
Citigroup oil analyst Tim Evans said he was surprised to see gasoline imports decline for the second week in a row and that the situation "bears watching."
However, with refineries boosting the amount of oil they produce, Evans said the market is well supplied.
Brent crude futures on the ICE Futures exchange in London climbed 55 cents to $71.53 a barrel.
Gasoline futures were flat Wednesday at $2.20 a gallon, but they had risen by roughly 20 cents a gallon over the past week in part because of the closure of a key shipping channel along the U.S. Gulf Coast that minimally disrupted crude-oil supplies to nearby oil refineries.
The channel has been off limits due to the spread of oil from a spill last week at a Citgo Petroleum Corp. refinery in Lake Charles, La. It could remain mostly closed through the end of the week, depending on how the cleanup proceeds, a Coast Guard spokesman said.
Citgo said late Tuesday that it requested - and was approved for - a loan of 250,000 barrels of crude oil from the U.S. Strategic Petroleum reserve "to help maintain production rates" at its 425,000 barrel-per-day Lake Charles facility while the channel remains closed.
The shipping snags came days ahead of the July 4 holiday in the U.S., when gasoline demand typically peaks as American travelers hit the road. The U.S. Coast Guard said Wednesday the Calcasieu Ship Channel was partially reopened, and that limited tug and barge traffic continues to move through an intercoastal waterway.
Merrill Lynch said in a research note that it expects "severe supply bottlenecks" to persist for another two years, though it said with crude oil inventories rising around the globe OPEC may need to cut production next year.
On Tuesday, Iran's Ayatollah Ali Khamenei said the country does not need negotiations with the United States over its nuclear program, apparently seeking to reassure hard-liners the country will not cave in as it considers a key Western incentives package.
Iran is OPEC's No. 2 producer of oil, and traders are worried about the outlook for those supplies.
Washington has warned Iran that it could face political and economic sanctions before the U.N. Security Council if it doesn't stop its nuclear activities, which the United States and its European allies say is an attempt to produce nuclear weapons. Tehran says the uranium will be used only for a peaceful energy program.
In other trading Wednesday, heating oil futures were flat at $1.96 a gallon, while natural gas futures were steady at $6.11 per 1,000 cubic feet.
Energy futures have been propped up in recent months by strong global demand and geopolitical worries such as violence in Nigeria, the war in Iraq and Iran's diplomatic showdown with the West over its nuclear program.
Light sweet crude for August delivery rose 68 cents to $72.20 a barrel on the New York Mercantile Exchange.
In its weekly petroleum report, the Energy Department said commercial inventories of crude oil declined last week by 3.4 million barrels to 343.7 million barrels, or 4 percent above year ago levels. Supplies of gasoline shrank by 1 million barrels to 212.4 million barrels, or 2 percent below year ago levels.
Over the past four weeks, daily gasoline demand was up 0.9 percent at 9.4 million barrels a day.
Citigroup oil analyst Tim Evans said he was surprised to see gasoline imports decline for the second week in a row and that the situation "bears watching."
However, with refineries boosting the amount of oil they produce, Evans said the market is well supplied.
Brent crude futures on the ICE Futures exchange in London climbed 55 cents to $71.53 a barrel.
Gasoline futures were flat Wednesday at $2.20 a gallon, but they had risen by roughly 20 cents a gallon over the past week in part because of the closure of a key shipping channel along the U.S. Gulf Coast that minimally disrupted crude-oil supplies to nearby oil refineries.
The channel has been off limits due to the spread of oil from a spill last week at a Citgo Petroleum Corp. refinery in Lake Charles, La. It could remain mostly closed through the end of the week, depending on how the cleanup proceeds, a Coast Guard spokesman said.
Citgo said late Tuesday that it requested - and was approved for - a loan of 250,000 barrels of crude oil from the U.S. Strategic Petroleum reserve "to help maintain production rates" at its 425,000 barrel-per-day Lake Charles facility while the channel remains closed.
The shipping snags came days ahead of the July 4 holiday in the U.S., when gasoline demand typically peaks as American travelers hit the road. The U.S. Coast Guard said Wednesday the Calcasieu Ship Channel was partially reopened, and that limited tug and barge traffic continues to move through an intercoastal waterway.
Merrill Lynch said in a research note that it expects "severe supply bottlenecks" to persist for another two years, though it said with crude oil inventories rising around the globe OPEC may need to cut production next year.
On Tuesday, Iran's Ayatollah Ali Khamenei said the country does not need negotiations with the United States over its nuclear program, apparently seeking to reassure hard-liners the country will not cave in as it considers a key Western incentives package.
Iran is OPEC's No. 2 producer of oil, and traders are worried about the outlook for those supplies.
Washington has warned Iran that it could face political and economic sanctions before the U.N. Security Council if it doesn't stop its nuclear activities, which the United States and its European allies say is an attempt to produce nuclear weapons. Tehran says the uranium will be used only for a peaceful energy program.
In other trading Wednesday, heating oil futures were flat at $1.96 a gallon, while natural gas futures were steady at $6.11 per 1,000 cubic feet.
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