NEW YORK (CNNMoney.com) -- Oil climbed near $73 a barrel Wednesday after a government inventory report showed crude supplies fell almost twice as much as analysts expected and the Federal Reserve announced it would keep interest rates near 0%.
Crude oil for January delivery rose $1.97, or 2.79%, to settle at $72.66 a barrel. On Tuesday, oil rebounded from a nine-day retreat, rising $1.18 to settle at $70.69 a barrel.
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"Inventories usually start to fall late in the year, but people have gotten used to them growing so this [report] took them by surprise," said James Cordier, president of Liberty Trading Group.
Investors' optimism about the global economic recovery and their larger appetite for risk also helped boost oil prices, Cordier said.
Stocks rose but lost some ground Wednesday after the Federal Reserve announced its decision to keep interest rates near 0%.
The slight weakness in the dollar has also brought up oil prices, Cordier said. Oil, like other commodities, is priced in dollars, so a weaker greenback helps lift prices.
The Fed's decision could put more pressure on the dollar and push oil prices higher, according to Chris Lafakis, an economist at Moody's Economy.com.
Although the drop in inventory was a positive sign, there is still a significant overhang of supply, Cordier said.
"We're not necessarily going to rally like this for the next three days," he said. "This could be a sign that the market has switched its course to the upside, but we still have a lot of inventory to go through."
Cordier expects oil prices to reach $75 a barrel by the end of the year.
Inventory report. The Energy Information Administration reported a drop of 3.7 million barrels in crude stocks. Analysts forecast oil supplies to fall 2 million barrels, according to a consensus estimate collected by energy information provider Platts.
Gasoline stockpiles rose by 900,000 barrels, the report showed, lower than analysts' predictions of a 1.5 million barrel rise.
Inventories of distillate fuel, a category that includes heating oil and diesel, decreased by 2.9 million barrels. Analysts estimated a decline of 750,000 barrels.
Gasoline prices. The national average price for a gallon of regular unleaded gas fell to $2.594, down four tenths of a cent from the previous day's price of $2.598, according to motorist group AAA. This is the eighth consecutive day prices have declined. 
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