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West Texas Intermediate crude rose to the highest in more than two weeks as strong refinery demand reduced U.S. inventories.
Prices gained for a third time in four days. U.S. refineries operated at the highest rate in nine years in the week ended July 11, according to the Energy Information Administration. Crude inventories at Cushing, Oklahoma, the delivery point for WTI, dropped to a six-year low as oil flowed to the Gulf Coast where prices were higher. Brent was steady as the U.S. and Europe threatened further sanctions against Russia.
"The supply side really should keep us higher," said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. "Cushing is the delivery point so the drawdown there is giving the market a boost. The drop at Cushing is definitely favoring WTI over Brent."
WTI for August delivery, which expires tomorrow, gained 74 cents, or 0.7 percent, to $103.85 a barrel at 9:54 a.m. on the New York Mercantile Exchange. The more-active September future was up 30 cents at $102.25. The volume of all futures was about 17 percent above the 100-day average.
Brent for September settlement gained 2 cents to $107.26 a barrel on the London-based ICE Futures Europe exchange. The volume of all futures traded was about 19 percent below the 100-day average for the time of day. WTI was at a discount of $5.06 to Brent on the ICE, down from $5.29 on July 18.
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