NEW YORK (CNNMoney.com) -- Oil prices moved higher Wednesday after the government said supplies of gasoline fell far more than expected.

U.S. crude for September delivery settled 19 cents higher at $73.94 a barrel on the New York Mercantile Exchange. Crude was 20 cents higher just prior to the report.

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The Energy Information Administration, in its weekly inventory report, said gasoline stocks fell by 3.2 million barrels. Analysts were looking for a drop of just 200,000 barrels, according to Reuters.

Distillates, used to make diesel fuel and heating oil, rose by 800,000 barrels while crude supplies were unchanged. Analysts were looking for a 1.5 million barrel build in distillates and for crude supplies to drop by 700,000 barrels, according to Reuters.

The report said crude and distillate stocks were at above levels for this time of year, while gasoline supplies were about average.

Oil prices were also kept firm Wednesday by continued fighting in the Middle East an an attack on a Nigerian oil plant.

Foreign ministers, including U.S. Secretary of State Condoleezza Rice, met in Rome to discuss how to end the 15-day old fighting between Israel and Lebanon and bring humanitarian aid to Lebanon.

The meeting, co-chaired by Italy and the United States, was to consider the conditions for a ceasefire, the dispatch of an international peacekeeping force to southern Lebanon and the opening of safe corridors for aid. Diplomats played down the chance of a quick deal.

France said it would present to the conference the "first outlines" of a draft U.N. Security Council resolution calling for an immediate ceasefire in Lebanon followed by negotiations.

Oil hit a record trading high of $78.40 a barrel almost two weeks ago as fighting erupted. Consumers are worried that the war could spread and endanger exports and shipping from the region that supplies almost a third of the world's oil and contains 60 percent of its proven reserves.

While geopolitical trouble garners much of the headlines, experts say it's only partly responsible for oil's runup over the last few years, which has nearly quadrupled the price of crude from around $20 a barrel in early 2002.

Experts site fundamental supply and demand as the main reason oil has gotten so expensive, as the world's economy races ahead consuming more and more oil but worldwide output remains little changed. Speculative buying is also thought to play a small role in oil's high price.

There was a fresh attack on an oil facility in the world's eighth biggest exporter Nigeria, where a militant campaign has cut output by more than a quarter this year.

Italian firm Agip said an overnight raid on a flow station in the Niger Delta had caused a "significant decrease" in output. Agip normally exports 200,000 barrels per day through its Brass tanker terminal in Bayelsa.

The attack came two days after Nigeria's biggest foreign operator Royal Dutch Shell said a pipeline leak had cut 180,000 barrels per day (bpd) of oil output. The cut took Shell's supply loss in Nigeria to 653,000 bpd.

"The market is extremely vulnerable to supply disruption," Kevin Norrish of Barclays Capital told Reuters. "It is not easy to make up for the loss of that type of crude."

High quality Nigerian crude is prized by U.S. refiners looking to meet peak summer gasoline demand.

-- from staff and wire reports

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