NEW YORK (CNNMoney.com) -- Oil prices moved off earlier lows Wednesday after a government report showed a surprise drop in crude supplies and OPEC showed no signs of increasing production.
U.S. light crude for August delivery fell 21 cents to settle at $72.62 a barrel on the New York Mercantile Exchange. Oil traded down 67 cents just prior to the report's release.
In its weekly inventory report, the Energy Information Administration said crude stocks fell 1.4 million barrels last week. Analysts were looking for a gain of 100,000 barrels, according to Reuters.
But gasoline supplies, closely watched during the summer driving season and running low all summer, rose 1.2 million barrels. Analysts were looking for an increase of 900,000 barrels.
Distillates, used to make heating oil and diesel fuel, increased by 800,000 barrels, in line with estimates. Distillates have been out of the spotlight all summer, but are beginning to attract attention as traders look forward to the winter months.
The report showed a slight uptick in refining activity, which has been low all summer following a series of accidents and other closures at refineries.
Nonetheless, one trader said it just wasn't enough.
"I didn't see anything bearish in this report," said Nauman Barakat, an energy trader at Macquarie Futures, the trading arm of Macquarie investment bank. "Refinery utilization is still struggling. The 1.2 million [gasoline] build is not that big of a deal, we're in an environment where we still have very strong demand."
The refinery outages helped push national average gasoline prices to a record $3.227 a gallon back in May, although prices have since eased to around $3 a gallon.
Oil producing nations have been quick to say the refinery squeeze - not a lack of crude - is the main reason for high oil and gas prices, although analysts say crude supplies are again a concern as refining activity worldwide picks up.
Despite those concerns, the Organization of the Petroleum Exporting Countries is showing no sign of easing output restraint, according to Reuters.
Top exporter Saudi Arabia has told its major customers and refiners in Asia and Europe that it will not relent on its oil export curbs next month, according to a Reuters report.
The kingdom's oil minister, Ali al-Naimi, said there was a good balance between supply and demand, but tightness in supply of refined oil products such as gasoline, plus international political tensions were helping to push prices higher.
"You can't put oil on the market without a buyer," Reuters quoted him telling reporters in Warsaw. "Nobody today is looking for additional crude because all you have to do is look at the level of inventories which are in a very, very comfortable position."
Qatar's Energy Minister Abdullah al-Attiyah said Wednesday OPEC could do nothing about the high price of oil, according to the report.
Crude prices are now just about $6 shy from their all-time trading high of $78.40 hit last July.
- from staff and wire reports 
