NEW YORK – The price of oil rose Wednesday as a big drop in U.S. oil supplies offset concerns about a plunge in the stock market.
Benchmark oil for July delivery rose 43 cents to close at $93.74 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, thanks to a sharp drop in imports. Analysts expected a drop of 1 million barrels. Gasoline supplies also fell, by 400,000 barrels, while analysts were looking for an increase.
Tighter supplies tend to push oil prices higher.
Oil gave back some gains in the afternoon as the stock market slumped after some subpar U.S. economic news. The broad Standard & Poor’s 500 index dropped 22 points, or 1.4 per cent, to 1,608. But the supply report gave oil traders enough cover to hold on to some gains.
“A tug of war appears to be playing out between some weakening equities and some bullish news on the fundamental oil front,” wrote Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates.
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, fell 20 cents to finish at $103.04 a barrel on the ICE Futures exchange in London.
Also on the New York Mercantile Exchange:
— Wholesale gasoline was flat at $2.82 a gallon.
— Heating oil fell 1 cent to end at $2.86 per gallon.
— Natural gas was flat at $4.00 per 1,000 cubic feet.
Pablo Gorondi in Budapest, Pamela Sampson in Bangkok and Christopher S. Rugaber in Washington contributed to this report.