Oil extends gains above $74 as US supplies drop

SINGAPORE — Oil prices extended gains above $74 a barrel Thursday in Asia, adding to a big advance the previous session as falling U.S. crude inventories suggested demand is improving. Benchmark crude for July delivery was up 9 cents to $74.47 a barrel at early afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract $2.39 to settle at $74.38 on Wednesday. Crude supplies fell more than expected last week, dropping by 1.8 million barrels, the Energy Department's Energy Information Administration said Wednesday. Analysts had expected an increase of 1.3 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos. "The drawdown gave the report a bullish flavor that quickly translated into higher oil prices," Cameron Hanover said in a report. "It was the first case of back-to-back crude oil stock draws in a row since January, and that suggested to traders that recently burdensome inventories may be starting to diminish." In other Nymex trading in July contracts, heating oil rose 0.42 cent to $2.0138 a gallon and gasoline gained 0.19 cent to $2.0416 a gallon. Natural gas was up 2.7 cents at $4.704 per 1,000 cubic feet. Brent crude was down 9 cents at $74.18 a barrel on the ICE futures exchange. — AP