SINGAPORE: Oil prices rose above $73 a barrel Wednesday in Asia as an unexpected drop in U.S. crude supplies suggested demand may be recovering.

Benchmark crude for January delivery was up 86 cents to $73.48 at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract dropped $1.31 to settle at $72.62 on Tuesday.

U.S. crude inventories unexpectedly fell last week, the American Petroleum Institute said late Tuesday. Crude stocks fell 5.8 million barrels while analysts had expected an increase of 600,000 barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

The Energy Department's Energy Information Administration plans to announce its inventory report later Wednesday.

"If the EIA number is similar, I think the market will jump $2 or $3 because this is a very bullish number," said Clarence Chu, a trader with market maker Hudson Capital Energy in Singapore.

Traders in Asia are also eyeing the U.S. dollar. Investors tend to buy crude as a hedge against inflation and a weaker U.S. currency. A strengthening dollar usually helps push oil prices down.

The euro rose to $1.4729 from $1.4703 on Tuesday while the dollar fell to 87.52 yen from 88.38.

In other Nymex trading in January contracts, heating oil rose 0.76 cent to $2.00 while gasoline gained 1.93 cents to $1.94. Natural gas fell 1.6 cents to $5.10 per 1,000 cubic feet.

In London, Brent crude for January delivery rose 79 cents to $75.98 on the ICE Futures exchange.