Oil prices rose Wednesday after the government reported that U.S. crude supplies declined more than expected. Light sweet crude for August delivery was up more than $1.50 to above $61 a barrel in midday trading on the New York Mercantile Exchange. The Energy Department reported that U.S. crude inventories fell a bigger-than-expected 2.8 million barrels last week. Despite the decline, the United States has a huge surplus of oil, with its inventory of 344.5 million barrels 16.5 percent above year-ago levels. Supplies of gasoline and distillates - including diesel, heating oil, and jet fuel - also rose last week, the department's Energy Information Administration (EIA) said. Crude prices have fallen from their recent peak over the past few weeks, hovering around $60 a barrel as growing numbers of unemployed Americans created doubts about a quick economic rebound. However, a weaker U.S. dollar combined with a rally in equities markets has kept oil prices from falling further.
