July 14 (Bloomberg) -- Crude oil fluctuated, rebounding from earlier losses, after a U.S. government report showed that inventories declined three times as much as expected last week and refineries bolstered operating rates to a two-year high. “A 5 million draw in crude oil supplies is pretty bullish any way you look at it,” said Carl Larry, president of Oil Outlooks and Opinions LLC in Houston. “The outlook for prices is still higher, unless the economy continues to just trudge along.” Crude oil for August delivery rose 2 cents to $77.17 a barrel at 11:10 a.m. on the New York Mercantile Exchange. Oil traded at $76.62 before the release of the report at 10:30 a.m. in Washington. Brent crude for August settlement increased 23 cents, or 0.3 percent, to $76.88 a barrel on the London-based ICE Futures Europe exchange. August Brent futures expire tomorrow. The more- active September contract rose 10 cents to $76.83 a barrel. Retail Sales Drop Prices also dropped as sales at U.S. retailers fell in June for a second month, indicating the pace of economic recovery moderated heading into the second half of 2010. Excluding auto dealers, demand fell 0.1 percent, matching the median forecast of economists surveyed. Industrial production in the 16-member euro region increased less than forecast in May as the economy struggled to gather strength. Output climbed 0.9 percent from the previous month, when it also increased 0.9 percent, the European Union statistics office in Luxembourg said today. --Editors: Richard Stubbe, Joe Link. To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net. To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.

Source