AFP reported that oil prices rallied on bargain hunting a day after a sell off driven by the end of a Norwegian oil workers' strike and as traders digested an upbeat US energy inventories report. New York's main contract light sweet crude for August ended the session at USD 85.81 per barrel an increase of USD 1.90 from Tuesday's closing level. Brent North Sea crude for delivery in August leaped USD 2.26 to settle at USD 100.23 per barrel in London trade. Andy Lipow at Lipow Oil Associates said that the lift came as traders reacted to the US crude oil stockpiles number that fell more than anticipated last week The US Energy Information Administration said that American crude oil inventories slumped by almost 4.7 million barrels in the week ending July 6th 2012. That was much larger than market expectations of a 1.1 million barrel decline and suggested rising demand in the world's largest oil consuming economy. The oil market had tumbled by more than USD 2 after Norway halted an oil workers' strike that threatened production while news of weak Chinese crude imports raised demand concerns. Mr Jack Pollard analyst of Sucden said that "Crude oil prices are seeing a little bounce today, following yesterday's sell off that was in part predicated upon the progress in the Norway negotiations.� US demand is weakening further due to a sluggish economy, the European economic turbulence is suppressing that continent's demand, and Indian demand is negatively affected by the recent massive floods.

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