Crude oil above $103 on US supply drop report

PABLO GORONDI, Associated Press

By early afternoon in Europe, benchmark U.S. oil for July delivery was up 60 cents to $103.26 a barrel in electronic trading on the New York Mercantile Exchange. The Nymex contract rose 19 cents Tuesday, closing at $102.66.

Brent crude, a benchmark for international oils, was up 42 cents to $109.24 a barrel on the ICE Futures exchange in London.

The American Petroleum Institute said crude stockpiles fell 1.4 million barrel last week. If the figure is confirmed later Wednesday by the Energy Department's report — the market benchmark — it would be another sign of increased demand in world's largest economy and sustain oil prices.

"The inventory reduction would have to be more marked than that reported by the API to drive oil prices up any further," said analysts at Commerzbank in a note to clients. "The global oil market is amply supplied at present."

In Libya, helicopters flown by pilots loyal Gen. Khalifa Hifter, who survived a suicide attack on his residence Wednesday, have been bombing Islamist militia camps in the eastern city of Benghazi. Libya, previously a key supplier of crude to European refineries, has been unable to normalize its oil industry since the 2011 civil war.

In eastern Ukraine, meanwhile, clashes between government troops and pro-Russia insurgents have intensified since the May 25 election of President-elect Petro Poroshenko. Russia is a vital supplier of oil and natural gas to Europe, with much of it transported through pipelines in Ukraine.

In other energy futures trading on Nymex:

— Wholesale gasoline was little changed at $2.9477 a gallon.

— Natural gas fell 2.4 cents to $4.605 per 1,000 cubic feet.

— Heating oil added 0.46 cent to $2.8704 a gallon.