05/15/2013 01:21 EDT | Updated 07/15/2013 05:12 EDT

Oil back above $94 a barrel after dropping nearly 2% on dreary US, Europe data

NEW YORK, N.Y. - The price of oil rose back above US$94 Wednesday after dropping earlier on disappointing economic reports from both Europe and the United States.

Benchmark West Texas Intermediate crude for June delivery was up nine cents to finish at US$94.30 a barrel on the New York Mercantile Exchange. It fell as low as $92.13 in the morning before rising in tandem with U.S. stock markets.

Recently the stock market and, to a lesser degree, the oil market have shrugged off reports of sluggish economic growth, because it suggests that the U.S. Federal Reserve will keep pumping money into financial markets.

New figures released Wednesday showed the eurozone's economy continued to contract in the first quarter, keeping it in recession for a sixth consecutive quarter. Meanwhile, a report in the U.S. showed factories cut back sharply on production in April, suggesting economic growth may be slowing this spring.

That dreary economic news initially overshadowed the latest data from the U.S. Energy Department showing that U.S. oil supplies declined unexpectedly last week.

Crude supplies declined by 600,000 barrels, or 0.2 per cent, to 394.9 million barrels, in the week ended May 10. Analysts had expected an increase of 300,000 barrels. Still, demand for gasoline and distillates such as diesel remain below year-ago levels.

Brent crude, a benchmark for many international oil varieties, rose 99 cents to US$103.50 a barrel, after earlier dropping to $100.91 on the ICE Futures exchange in London.

In other energy futures trading on Nymex, wholesale gasoline rose three cents to finish at US$2.87 a U.S. gallon (3.79 litres), heating oil was flat at US$2.88 a gallon and natural gas added five cents to end at $4.07 per 1,000 cubic feet.