Crude oil stockpiles drop

Crude inventories dropped again last week, though gasoline stockpiles continued to rise as refineries increased output, the government said Wednesday.

Crude inventories fell by 3.7 million barrels, or 1 percent, to 350.2 million barrels, which is 18.3 percent above year-ago levels, the Energy Department's Energy Information Administration said in its weekly report.

Analysts had expected a drop of 2.2 million barrels for the week ended June 26, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Gasoline inventories rose by 2.3 million barrels, or 1.1 percent, to 211.2 million barrels, which is 0.9 percent above year-ago levels. Analysts expected stockpiles of the motor fuel to rise by 2.1 million barrels.

Demand for gasoline over the four weeks ended June 26 was 0.9 percent higher than a year earlier, averaging nearly 9.2 million barrels a day.

At the same time, U.S. refineries ran at 87.0 percent of total capacity on average, a drop of 0.1 percentage point from the prior week. Analysts expected capacity to rise to 87.5 percent.

Inventories of distillate fuel, which include diesel and heating oil, rose by 2.9 million barrels to 155 million barrels for the week ended June 26. Analysts expected distillate stocks to jump 1.4 million barrels.

Crude rose $1.17 to $71.06 per barrel on the New York Mercantile Exchange, off of earlier highs before the government data was released.