Oil settles 3 pct higher after inventory fall

By Rebekah Kebede

NEW YORK (Reuters) - Oil prices settled over 3 percent higher on Wednesday, supported by falling U.S. crude oil inventories, news of quarterly corporate results that were better than expected and some signs of economic recovery.

U.S. crude settled at $61.54 a barrel, up $2.02 or 3.39 percent after reaching a high of $61.98 a barrel.

London Brent crude settled at $63.09 a barrel, up $2.23.

Crude stocks in the United States, the world's top oil consumer, fell last week by a greater-than-expected 2.8 million barrels to 344.5 million barrels, the U.S. Energy Information Administration said.

"The larger-than-expected crude stock draw of 2.8 million barrels is attracting much attention so far in forcing values to fresh highs for the day," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.

Oil prices also received support from gains in U.S. stocks, which rose after news of better-than-expected results from Intel Corp and Goldman Sachs.

Equities were also supported by data showing U.S. industrial output declined more slowly in June, while New York state's factory survey was the strongest in more than a year.

The U.S. Federal Reserve said on Wednesday that the economy may not contract as sharply as previously expected.