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Oil Futures Settle Sharply Higher As Crude Inventories Drop

Crude oil prices surged higher on Wednesday after data showed a drop in crude inventories in the U.S. in the week ended July 22nd.

Cuts in Russian gas flows to Europe contributed as well to oil's sharp rise. According to reports, gas flows through the Nord Stream 1 pipeline fell to a fifth of the pipeline's capacity on Wednesday.

West Texas Intermediate Crude oil futures for September ended higher by $2.28 or about 2.4% at $97.26 a barrel.

Brent crude futures settled at $106.62 a barrel today, gaining about 2.13%.

Data from U.S. Energy Information Administration (EIA) showed crude stockpiles in the U.S. dropped 4.52 million barrels last week, about three times the expected decline.

Gasoline inventories in the U.S. tumbled 3.3 million barrels last week after climbing a combined 9.32 million for the weeks ended July 15th and July 8th.

The EIA data also showed that distillate stockpiles fell by 784,000 barrels last week, as against an expected drop of about 500,000 barrels.

Data from the American Petroleum Institute showed U.S. crude stocks dropped by about 4 million barrels last week, nearly four times the fall expected by analysts.

Meanwhile, the Federal Reserve raised interest rates by 75 basis points, as expected. The hike follows the 75 basis point increase in rates last month, and marks the fourth straight central bank meeting that has resulted in a rate hike.

In its accompanying statement, the Fed reiterated that it anticipates that ongoing increases in the target range will be appropriate.

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