Oil prices advance as Cushion supplies drop

Oil prices gained Thursday as a government report showed that crude inventories at Cushing, the delivery point for the U.S. crude contract unexpectedly dropped last week.

For the week ended May 23, stockpiles at Cushing, fell 1.5 million barrels to 21.7 million, the least since November 2008, according to the Energy Information Administration (EIA).

Cushing stockpiles have slipped from 41.8 million barrels in late January as the southern leg of the Keystone XL pipeline started to transport crude to Gulf Coast refineries.

Nationwide crude stockpiles in the United States increased 1.7 million barrels to 393 million last week. U.S. crude production increased 38,000 barrels a day to 8.472 million.

U.S job data came in optimistic. Jobless claims fell sharply last week. In the week ending May 24, the advance figure for seasonally adjusted initial claims was 300,000, a decrease of 27, 000 from the previous week's revised level, the Labor Department reported Thursday.

Crude prices also got some supports from the increasing tensions in Ukraine and Libya. The disruption of crude exports worsened in Libya as rebels shut down a recently reopened oil port.

Light, sweet crude for July delivery moved up 86 cents to settle at 103.58 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for July delivery gained 16 cents to close at 109.97 dollars a barrel.