Oil prices rise as US supplies drop

Oil prices advanced Wednesday as U.S. crude inventories tumbled more than expected. Energy Information Administration (EIA), the statistical arm of the Energy Department, on Wednesday released its report covering U. S. crude supplies of the week ending Jan. 11. U.S. crude stockpiles fell 7.66 million barrels to 350.2 million, the least since March 2012, exceeding market expectation of a decrease of 1.3 million barrels. The U.S. refineries operated at 90 percent of capacity, down 2. 3 percentage points from the previous week. U.S. crude inventories lost 41.2 million barrels since Nov. 22, the biggest seven-week decline since 1982. Oil prices reacted positively reflecting strong demand from the world's largest oil consumer. The upbeat U.S. economic data released Wednesday also helped support oil prices. Manufacturing activity in the New York region expanded at a faster pace in January, with the general business conditions index rising to 12.5, its highest level in more than a year, said the Federal Reserve Bank of New York on Wednesday. Moreover, the U.S. Producer Price Index for finished goods advanced 0.4 percent in December on a seasonally adjusted basis, the Labor Department reported. Light, sweet crude for February delivery moved up 1.58 dollars to settle at 94.17 U.S. dollars a barrel on the New York Mercantile Exchange,while Brent crude for February delivery gained 74 cents to close at 107.13 dollars a barrel.