Oil price rises on drop in US supplies

NEW YORK (AP) -- The price of oil rose Wednesday as a government report showed the nation's supplies of oil and gasoline declined last week.

Benchmark oil for July delivery was up 73 cents to $94.04 a barrel on the New York Mercantile Exchange.

The price rose as high as $94.48 a barrel immediately after the Energy Department said U.S. crude oil inventories shrank by 6.3 million barrels in the week ended May 31, compared with analysts forecast for a drop of 1 million barrels. Gasoline supplies also fell, by 400,000 barrels, while analysts expected an increase.

Tighter supplies tend to push oil prices higher.

Overall, however, oil markets have lacked momentum. The price of crude has moved sideways over the past year, trading within a range of $88 to $96 per barrel.

"There's been movement beyond that range, but the way big money makes money bigger is that they catch trends. With this limited range, there is no trend," said Carl Larry of Oil Outlooks and Opinions in a market commentary.

Jobs news in the U.S. failed to drive markets. Payroll processor ADP said that private employers added 135,000 jobs in May, up from 119,000 in April but below the average increase of 200,000 over the winter months. The government's more comprehensive monthly jobs report will be released Friday.

At the gas pump, the average price of a gallon stayed at $3.62 a gallon for a fifth straight day. That's 5 cents higher than at this time last year.

In other markets, Brent crude, a benchmark for many international oil varieties, was up 68 cents to $103.92 a barrel on the ICE Futures exchange in London.

Also on the New York Mercantile Exchange:

— Wholesale gasoline added 3 cents to $2.85 a gallon.

— Heating oil gained 2 cents to $2.88 per gallon.

— Natural gas fell 1 cent to $3.98 per 1,000 cubic feet.

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Pablo Gorondi in Budapest, Pamela Sampson in Bangkok and Christopher S. Rugaber in Washington contributed to this report.