NEW YORK (CNNMoney.com) -- Oil prices closed higher Wednesday, near $75 a barrel, after teetering for much of the session following a government report that said supplies of crude oil were far below estimates.

U.S. light crude for August delivery gained 79 cents to settle at $74.95 a barrel on the New York Mercantile Exchange.

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Oil prices are now flirting with the all-time record trading high of $75.78 hit July 7.

The Energy Information Administration, in its weekly stockpile report, said crude supplies fell by 6 million barrels. Analysts were looking for a 1.2 million barrel decline, according to Reuters.

Gasoline supplies fell by 400,000 barrels, while distillates, used to make heating and diesel fuel, rose by 2.6 million barrels. Analysts were looking for a 100,000 barrel drop in gasoline stocks and a 1.6 million barrel build in distillates.

"I expected to see a bigger jump," said Brian Hicks, co-manager of the Global Resource Fund at U.S. Global Investors, when prices were down earlier in the day. "But at this price level it's difficult to get the market to move much higher."

Hicks also noted the volatility surrounding the EIA report, saying its moved markets for the past year as traders place big bets before and after it's 10:30 a.m. ET release. But the real price swings surrounding the data are often not seen until the end of the day or even the day after as the information is digested by the full spectrum of investors.

Despite the fall in crude stocks, they still remain well above average, while gasoline and distillates are slightly above average, the report said.

Also fueling the drive toward a new record price was a report showing a projected increase in demand in 2007 and continued tension with Iran over its nuclear program.

The Paris-based International Energy Agency said Wednesday the world would need 1.57 million barrels per day more oil to fuel economic growth in 2007, up from annual growth of 1.21 million bpd this year, Reuters reported.

The report said much of that new demand would be met by non-OPEC producers in 2007 and by OPEC producers in the years following that.

On the international front, Iran said it wouldn't respond immediately to international offers to end its nuclear program, calling the details too ambiguous.

Oil traders had hoped the country, the world fifth-largest oil producer, would agree to the terms this week and ease some of the geopolitical pressure that has helped drive oil prices up nearly 20 percent since the start of the year.

Oil has soared in excess of 300 percent since 2002, mainly on tight supply and robust demand but exacerbated by rising production costs, speculative trading and international tensions.

Related: $70 oil: Get used to it

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