Oil price rises as stockpiles tumble .

OIL rose today, supported by a drop in US oil stockpiles even as a surprise jump in petrol inventories raised concerns about demand.
Light, sweet crude for August delivery settled $US1.37, or 1.9 per cent, higher at $US75.44 a barrel on the New York Mercantile Exchange after rising to $US75.90, the highest intra-day price for a front-month contract since June. Brent crude on the ICE futures exchange settled up $US1.20, or 1.6 per cent, at $US74.71 a barrel.
Oil futures traded higher throughout the session, receiving an early boost from the American Petroleum Institute's report yesterday of a massive decline in oil inventories.
The US Energy Information Administration followed by saying today that oil inventories plunged 5 million barrels in the week ended July 2, more than the 1.8-million-barrel drop forecasted by analysts in a Dow Jones survey.
Analysts said the drop in crude inventories kept investors optimistic that overall supplies are tightening, even as the EIA reported a 1.3-million-barrel increase in petrol stockpiles.
Oil inventories shot up during the economic downturn last year, and remain well above average as demand has struggled to recover even as the economy has grown at a healthy pace in 2010.
"The 5 million barrel draw ... was an attention grabber," said Rick Mueller of Energy Security Analysis Inc. "Any time you get a move as large as that, you get the market's attention."
A drop in jobless claims also boosted oil prices by allaying fears that the US economic recovery is slowing.