Oil Jumps Above $94 on U.S. Supply Report

The price of oil jumped above $94 a barrel Wednesday after an unexpected drop in U.S. crude supplies.

Benchmark oil was up 92 cents to $94.20 a barrel on the New York Mercantile Exchange.

Oil supplies fell by 1 million barrels, or 0.3 percent, to 360.3 million barrels last week. Analysts expected an increase of 2.5 million barrels. The drop was due mainly to a decline in imports. Gasoline supplies grew less than expected as refineries slowed output.

Still, supplies of oil and gasoline remain above average for this time of year, with crude inventories nearly 9 percent higher than a year ago and gasoline levels more than 3 percent higher. Domestic production of crude, at more than 7 million barrels a day, is the highest in 20 years.

Prices at the pump continue to slip lower. The national average for a gallon of gas is now $3.29, down about a penny from a week ago and 9 cents less than at this time last year.

Going forward, trading will be watching for the latest reading on China's economic growth Friday and contentious negotiations in Washington over the nation's borrowing limit.

Brent crude, used to price international varieties of oil, was up 37 cents to $110 per barrel on the ICE Futures exchange in London.

In other energy futures trading on Nymex:

• Wholesale gasoline rose 2 cents to $2.73 a gallon.
• Natural gas lost 7 cents to $3.38 per 1,000 cubic feet.
• Heating oil was flat at $3.01 a gallon.