By Matt Day Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Crude futures rose sharply Wednesday on hopes that a second straight weekly draw in U.S. oil inventories would ease pressure on the oversupplied market. Light, sweet crude for July delivery were up $1.86 at $73.85 a barrel on the New York Mercantile Exchange. The contract traded in a range of $72.03 to $74.03 a barrel. July Brent crude on the ICE futures exchange was up $1.37 at $73.67 a barrel. Futures traders are awaiting U.S. oil inventory data later Wednesday for signs that the U.S., the world's largest consumer of oil, will show a sustained increase in demand heading into the summer driving season. A weekly U.S. Energy Information Administration report, due out at 10:30 a.m. EDT, is expected to show a drop in domestic crude stocks. It would be the first time since January that crude inventories dropped for two consecutive weeks. Analysts surveyed by Dow Jones Newswires expect a drop of 700,000 in crude oil stockpiles in the week ended June 4. Gasoline inventories are seen falling by 400,000 barrels. Distillates stocks, including heating oil and diesel, are expected to rise by 300,000 barrels. The American Petroleum Institute, an industry group, on Tuesday showed a 4.5 million barrel drop in crude stocks, while gasoline stocks rose 1.481 million barrels and distillate stocks gained 3 million barrels. The U.S. oil market remains oversupplied, with inventories well above their five-year averages. Crude oil stocks at the Cushing, Okla., delivery point for the Nymex futures contract stand near record highs. Traders say inventories will have to continue to decline for oil to rise out of the $70 to $75 range it has been bound in during recent weeks. "It all comes back to the consumer because we have a lot of supply," said Stephen Schork, editor of the Schork Report, an energy and markets newsletter. "Demand is supposed to be going up. But we're still in a contango," Schork said, referring to the price structure in which near-term futures contracts are cheaper than those for future delivery. That indicates that near-term supplies exceed demand. Oil prices are down more than 15% since early May. Europe's sovereign debt problems and mixed U.S. economic data have indicated that the global economic recovery may be slower than expected, restricting growth in demand for petroleum products. The Organization of Petroleum Exporting Countries, in its monthly oil report on Wednesday, warned of likely downgrades in global consumption estimates in the second half and slightly cut its annual forecast on a slowing recovery. OPEC cut 2010 demand estimates for its crude by 70,000 barrels a day and now sees a year-on-year decline of 175,000 barrels a day. "This would leave no room for additional crude oil supplies in the market," it said. OPEC's next meeting isn't due until October. OPEC pumped 29.26 million barrels a day in May, while estimating demand for its oil at 27.73 million barrels a day in the second quarter and 29.6 million barrels a day in the third quarter. "With half of the year already passed, economic signs are not that rosy; nevertheless hope remains," OPEC said. Front-month July reformulated gasoline blendstock, or RBOB, was up 3.35 cents a gallon, at $2.0226 a gallon. July heating oil was up 2.90 a gallon, at $1.9943 a gallon. -By Matt Day, Dow Jones Newswires; 212-416-4986; matthew.day2@dowjones.com.

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