Oil advanced to a 14-month high

West Texas Intermediate crude advanced to a 14-month high after U.S. inventories tumbled for a second week, bolstering speculation that a glut in the central part of the country is dissipating.

Futures increased as much as 2.1 percent after the Energy Information Administration said that supplies dropped 9.87 million barrels to 373.9 million. The report was projected to show a 3.2 million-barrel fall, according to the median of 11 analyst responses in a survey.

Crude production rose 1.8 percent to 7.4 million barrels a day last week, the most since January 1992, the EIA said. Production has surged as the combination of horizontal drilling and hydraulic fracturing, or fracking, has unlocked supplies trapped in shale formations in the central part of the country.

Stockpiles at Cushing, Oklahoma, the delivery point for WTI. Inventories at the hub dropped 2.69 million barrels to 47 million last week, the report showed. Supplies reached a record 51.9 million barrels in the week ended Jan. 11.

Oil also gained as political upheaval in Egypt heightened concern that unrest will spread and disrupt shipments from the Middle East.

WTI crude for August delivery rose $1.93, or 1.9 percent, to $105.46 a barrel at 10:40 a.m. on the New York Mercantile Exchange. The contract traded at $105.04 before the release of the EIA report at 10:30 a.m. in Washington. The contract touched $105.62, the highest intraday level since May 2, 2012. The volume of all futures traded was 71 percent higher than the 100-day average for this time of day.

Brent oil for August settlement increased 45 cents, or 0.4 percent, to $108.26 a barrel on the London-based ICE Futures Europe exchange. The volume for all contracts was 23 percent above the 100-day average.