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Crude oil futures rally 1% to hit 1-week high after supply data

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Shutterstock photo - Crude oil futures rallied sharply to hit a one-week high on Wednesday, after a U.S. government report showed oil supplies fell significantly more-than-expected last week.

On the New York Mercantile Exchange, light sweet crude futures for delivery in July traded at USD94.40 a barrel during U.S. morning trade, up 1.2% on the day.

New York-traded oil prices rose by as much as 1.5% earlier in the day to hit a session high of USD94.47 a barrel, the strongest level since May 29.

Prices traded at USD94.04 a barrel prior to the release of the supply data.

The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories fell by 6.3 million barrels in the week ended May 31, blowing past expectations for a decline of 0.4 million barrels.

Total U.S. crude oil inventories stood at 391.3 million barrels as of last week.

The report also showed that total motor gasoline inventories decreased by 0.4 million barrels, compared to expectations for an increase of 0.5 million barrels.

Oil prices edged higher earlier in the day after data showed that the U.S. private sector added fewer-than-expected jobs in May.

Payroll processor ADP said non-farm private employment rose by a seasonally adjusted 135,000 in May, below expectations for an increase of 165,000.

The previous month's figure was revised down to a gain of 113,000 from a previously reported increase of 119,000.

Also Wednesday, the Institute of Supply Management said its non-manufacturing purchasing manager's index rose to 53.7 in May from a reading of 53.1 in April.

Analysts had expected the index to inch up to 53.5 last month.

Investors are now looking ahead to Friday's closely watched report on U.S. nonfarm payrolls for further hints regarding the strength of the U.S. economy and the need for further stimulus from the Fed.

The U.S. is the world's biggest oil consuming country, responsible for almost 22% of global oil demand.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for June delivery added 0.65% to trade at USD103.90 a barrel, with the spread between the Brent and crude contracts standing at USD9.50 a barrel. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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