Crude Oil Rises After Supplies Decline

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U.S. inventories declined as fuel consumption surged to a 16-month high.

Crude oil rose after a government report showed that U.S. inventories declined as fuel consumption surged to a 16-month high.

"This report is definitely supportive," said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. "It's pretty clear that we are primarily tracking the stock market, and that will determine where prices end the session."

Crude oil for July delivery increased 25 cents, or 0.3%, to $73.11 a barrel at 11:31 a.m. on the New York Mercantile Exchange. Oil traded at $72.96 before the release of the report at 11 a.m. in Washington. Brent crude for July settlement gained 60 cents, or 0.8%, to $74.35 a barrel on the London-based ICE Futures Europe exchange. The Standard & Poor's 500 Index rose 0.2 percent to 1,100.32. The dollar strengthened to $1.2196 per euro from $1.2249 yesterday. The common currency has slumped 15% against the greenback this year as concern mounts that Greece's debt crisis may spread to other nations using the euro.

Fuel consumption during the last week of May exceeded 21 million barrels a day in 2006 and 2007, climbing 8.1%, according to the Energy Department.

Gasoline inventories fell 2.65 million barrels to 219 million. Stockpiles were estimated to drop by 500,000 barrels.

Crude oil also climbed on signals that the U.S. economic recovery is accelerating. The Labor Department said initial jobless claims fell last week. Services industries in the U.S. grew for a fifth month, a report showed.

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