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Oil prices climb as US crude stocks fall

World oil prices advanced on Wednesday (July 23) after the US government reported a surprisingly large decline in the nation's oil inventories.

NEW YORK: World oil prices advanced on Wednesday (July 23) after the US government reported a surprisingly large decline in the nation's oil inventories.

US benchmark West Texas Intermediate for September delivery gained 73 cents to US$103.12 a barrel in its first day of trade on the New York Mercantile Exchange.

European benchmark Brent oil for September delivery climbed 70 cents to US$108.03 a barrel in London.

"A drop in (US) oil inventories gave crude prices a lift," said analyst Jasper Lawler at trading firm CMC Markets.

A report by the US Energy Information Administration Wednesday said American crude inventories tumbled by four million barrels in the week ending July 18.

That marked the fourth weekly decline in a row and was far bigger than the 2.5 million-barrel decline forecast by analysts.

The report also showed stocks at the closely watched trading hub of Cushing, Oklahoma, dropped by 1.5 million barrels.

"It's just a seasonal thing where you see crude stocks being drawn and products being refined while we're at a relatively high period of demand," said Matt Smith, analyst at Schneider Electric.

"We're right in the middle of driving season here," Smith added, referring to the summer vacation period, the busiest time of the year on highways and roads.

The report showed the refinery utilization rate was unchanged from the prior week at 93.8 percent, far above the 92.3 percent pace a year ago, as plants process more crude into gasoline and other fuels.

While traders are watching crises in Ukraine and Gaza that have drawn international attention, violence in Libya likely has the bigger effect on the oil market, Smith said.

Fighting continued at the Tripoli airport, which has been closed since July 13 because of clashes which have left at least 47 dead and 120 wounded, according to the health ministry.

At least five soldiers were killed on Tuesday in a double-suicide bombing on a special forces base under the command of Colonel Wanis Abu Khamada in the southeast of the city.

"The increase in violence in an oil-rich nation is going to have more of an impact on crude than is the events in Gaza," Smith said.

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