Crude prices soared above $73 a barrel on Wednesday, as rising U.S. equities and an unexpected drop in inventories propelled oil prices to finish at their highest level since early June. Oil surged as much as 5.2% yesterday after crude stockpiles dropped 8.4 million barrels last week, the most since the week ended May 23, 2008, an Energy Department report showed. Crude Oil also gained as the U.S Dollar declined against other currencies, increasing the appeal of commodities to investors looking for an inflation hedge.
Oil prices fell earlier on Wednesday, hitting a low of $68.05 after a near 5% slump in Chinese shares sent doubts rippling through global markets about the strength of the world economic recovery. Traders also watched for storms in the Atlantic Basin but no immediate threat was seen to U.S. oil installations in the Gulf of Mexico. Expectations for a potential rebound in the economy could increase fuel consumption and have already helped lift prices.