Oil prices rise to nearly $104 after US supplies drop

Oil prices have seen yet another increase, reaching around USD 104 per barrel amid fears that demand may rise after US crude supplies unexpectedly dropped. On Wednesday, benchmark oil for June delivery was up 28 cents to USD 103.83 a barrel in electronic trading on the New York Mercantile Exchange, the Associated Press reports. Brent crude for June delivery was also up 10 cents at USD 118.26 per barrel in London. The increase came after the American Petroleum Institute said Tuesday that crude inventories fell 1.0 million barrels last week while analysts had predicted an increase of 1.5 million barrels. Stronger US crude demand could offset weakness in Europe where the region's debt crisis may force further government spending cuts that would hurt economic growth. The prices also rose as traders looked ahead to the US Federal Reserve's latest monetary policy decisions on Wednesday. Global oil prices have increased in recent months after Iran decided to halt its crude sales to certain European countries in response to the European Union (EU) oil embargo on Tehran.