NEW YORK (CNNMoney.com) -- Oil prices rallied above $75 a barrel Wednesday after the federal government said supplies, particularly those of gasoline, fell more than expected last week.
U.S. light crude for August delivery settled up $1.03 to $75.05 a barrel on the New York Mercantile Exchange. Oil had traded up 34 cents just prior to the report's release.
In its weekly inventory report, the Energy Information Administration said crude stocks declined by 500,000 barrels last week. Analysts were looking for a drop of 200,000 barrels, according to Reuters.
Distillates, used to make heating oil and diesel fuel, declined by 200,000 barrels, while gasoline supplies fell by 2.3 million barrels. Analysts were looking for a rise in both distillate supplies and gasoline stockpiles.
Crude prices are now about $3.50 shy of their all-time trading high of $78.40 hit last July.
Refineries operated at 91 percent of their operable capacity last week, up from 90.2 percent.
"The refinery runs are up and not keeping up with gas supply," said Mark Waggoner, president of Excel Futures, a commodity analysis and trading firm.
Only a lack of refining problems and a boost in imports would help ease prices for consumers, Waggoner said.
"We're right in the middle of the summer and demand is not waning," Waggoner said. "Demand will remain high." 
