Oil moves off lows on inventories

Unexpected drop in crude supplies sends prices back to the mid-$72 range; gasoline inventories rise.

July 11 2007: 10:39 AM EDT

NEW YORK (CNNMoney.com) -- Oil prices moved off earlier lows Wednesday after a government report showed a surprise drop in crude supplies.

U.S. light crude for August delivery fell 20 cents to $72.61 a barrel on the New York Mercantile Exchange. Oil traded down 67 cents just prior to the report's release.

In its weekly inventory report, the Energy Information Administration said crude stocks fell by 1.4 million barrels last week. Analysts were looking for a gain of 100,000 barrels according to Reuters.

But gasoline supplies, closely watched during the summer driving season and running low all summer, rose by 1.2 million barrels. Analysts were looking for an increase of 900,000 barrels.

Distillates, used to make heating oil and diesel fuel, increased by 800,000 barrels, in line with estimates. Distillates have been out of the spotlight all summer, but are beginning to attract attention as traders look forward to the winter months.

Crude prices are now just about $6 shy from their all-time trading high of $78.40 hit last July