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updated: 8/16/2012 1:26 PM

Oil prices top $94 on big drop in U.S. supplies

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By Associated Press

LONDON -- Oil remained above $94 a barrel Thursday after an unanticipated drop in U.S. crude inventories and stronger retail sales helped keep near three-month high.

Benchmark oil for September delivery was down 13 cents to $94.21 a barrel in midday trading in Europe in electronic trading on the New York Mercantile Exchange. The contract rose 90 cents to finish at $94.33 per barrel Wednesday in New York.

On the ICE Futures exchange in London, Brent crude was up 35 cents at $114.66.

The Energy Department said Wednesday that stockpiles fell 3.7 million barrels last week to 366.2 million barrels, suggesting stronger demand. Analysts had predicted a decline of 1.5 million barrels, according to Platts, the energy information arm of McGraw-Hill. It marked the third consecutive large weekly decrease in oil supplies. Decreases tend to cause a rise in oil prices.

Meanwhile, better-than-expected U.S. retail sales for July also helped support crude prices, according to energy analyst Stephen Schork. Signs that Americans are spending money again added to expectations that oil demand would increase. Government data on Wednesday showed Americans increased their retail spending in July by the most in five months, a sign that "shows an economy in recovery mode," Schork said in a report.

Increasing tensions in the Middle East and Brazil's unveiling of a $66 billion stimulus package have also had a role to play in pushing prices higher, according to JBC Energy Reports.

In other futures trading on Nymex, heating oil was unchanged at $3.09 per gallon. Gasoline rose 8 cents to $3.08 per gallon. Natural gas was unchanged at $2.75 per 1,000 cubic feet.

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