US oil prices soar as inventories fall

The US oil prices soared after an official report showed US crude oil inventories had plunged.

US crude inventories dropped 1.8 million barrels to 397.6 million barrels for the week that ended May 2, Xinhua quoted the Energy Information Administration (EIA), the statistics arm of the US Department of Energy, as saying Wednesday.

As the summer driving season gets closer, analysts believe the sharp drop in crude inventories suggests the demand for oil was stronger than expected.

Crude markets were also supported by the Federal Reserve Chair Janet Yellen's generally dovish testimony in Congress.

The Fed expected considerable time before normalizing the rate policy, and most Fed officials expect to normalize the rate policy in 2015 or 2016, Yellen said before the joint economic committee of Congress.

The US central bank announced a further cut in monthly bond purchases at its April policy meeting, by another $10 billion to $45 billion starting in May, while reaffirming that a highly accommodative stance of monetary policy remains appropriate.

Light, sweet crude for June delivery moved up $1.27 to settle at $100.77 a barrel on the New York Mercantile Exchange, while Brent crude for June delivery gained $1.07 to close at $108.13 a barrel.