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US oil jumps as stockpiles plummet

Drilling for oil in the Bakken shale formation outside Watford City, N.D.
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Drilling for oil in the Bakken shale formation outside Watford City, N.D.

U.S. oil prices extended gains to over a dollar, hitting more than $101 a barrel on Wednesday after government data showed crude stocks in the world's largest oil consumer fell sharply last week.

The jump in the U.S. crude price narrowed its discount versus Brent to less than $5 per barrel for the first time since April as the international benchmark remained under pressure after falling to a three-month low in the previous session.

The U.S. Energy Information Administration (EIA) said domestic crude stocks fell by 7.5 million barrels last week, far more than anticipated and including a 650,000-barrel drop at the Cushing, Oklahoma delivery point of the U.S. crude contract. The EIA data showed that gasoline and distillate stocks rose more than expected.

U.S. crude for August delivery rose $1.24 to settle at $101.20 a barrel. Brent crude for August edged lower 20 cents under $106 a barrel, ahead of expiry at the close of the session. The September contract gained 50 cents to $107 a barrel.

Also providing support was data from China showing its economy grew faster than expected, while an official said two of Libya's main ports were unlikely to export oil before August.

--By Reuters, with CNBC.com. For more information on commodities, please click here.

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