NEW YORK -- The price of oil breached $62 a barrel in New York Wednesday, scaling a new six-month high, amid a bigger-than-expected drop in US crude reserves and a weakening greenback.
New York's main contract, light sweet crude for July delivery, rose $1.94 from Tuesday's close to end at $62.04 per barrel, after hitting a high of $62.26.
Brent North Sea crude for July delivery also hit a six-month peak of $61.80 a barrel, before ending $1.67 higher to $60.59 per barrel.
In less than three weeks, crude prices have jumped 20 percent.
The new price peaks on Wednesday came after the US Department of Energy announced that American oil inventories tumbled 2.1 million barrels in the week ending May 15.
That was far more than market expectations of a 700,000 barrel drop and indicated that energy demand was holding firm despite a deep recession in the United States.
"Bigger-than-expected draws in crude and gasoline make this week's stats decidedly bullish," said Hussein Allidina of Morgan Stanley.
"There are signs of strength in crude oil markets for the first time in weeks," he said.
Oil also won support from the weak greenback because oil is priced in dollars.
In the foreign exchange market, the dollar sank Wednesday to a four-month low against the euro as rebounding Wall Street shares encouraged investors to switch away from the safe-haven US currency.
Oil hit record highs above $147 last July before the global financial crisis accelerated in the final months of 2008, pushing the world economy into recession.
At the start of the week, prices had already touched six-month highs, thanks to buoyant stock markets that signaled increased optimism for economic recovery, traders said.
Unrest in oil producer Nigeria also added to upward price pressure.
The recent price jump is "impressive given the severity of the downturn in global industrial production," said Ed Yardeni, chief investment strategist at Yardeni Research.
"It suggests that oil traders are expecting that once the global economy recovers, supplies will tighten up quickly relative to demand. In other words, it will be back to the future.
"If so, then the price could rebound back toward $100 a barrel in this scenario," Yardeni said.
