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Jul 23, 3:12 PM EDT

Oil gains on sharp drop in US supplies

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The price of oil rose Wednesday after the government reported that U.S. oil supplies rose more than expected.

The benchmark U.S. oil contract for September delivery gained 73 cents to $103.12 a barrel on the New York Mercantile Exchange. Brent crude for September delivery, a benchmark for international oils, rose 70 cents to $108.03 on the ICE Futures exchange in London.

The Energy Department reported that U.S. oil supplies fell by 4 million barrels last week, a sharper decline than the 2.6 million barrels expected by analysts surveyed by Platts, the energy information arm of McGraw-Hill Financial.

On the geopolitical front, U.S. Secretary of State John Kerry arrived in Tel Aviv, seeking to renew a push for a cease-fire after an earlier proposal by Egypt was rejected. Israeli troops battled Hamas militants near a southern Gaza Strip town even as Kerry reported some progress in his efforts.

In other Nymex trading:

- Wholesale gasoline fell 2 cents to $2.86 a gallon.

- Heating oil rose 2 cents to $2.875 a gallon.

- Natural gas fell 1 cent to $3.76 per 1,000 cubic feet.

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