US crude oil rallies to 16-month high US crude oil rallied to a 16-month high on further evidence of strong demand from oil refiners, pushing its discount to the Brent international benchmark to the lowest in almost three years. Nymex August West Texas Intermediate jumped $1.56 to $108.04 a barrel, the highest since October 2010, following the release of data showing a further fall in oil inventories at Cushing, Oklahoma, the delivery point for the US benchmark. The US benchmark was later trading at $107.84 a barrel, up $1.36. WTI has risen by almost 17 per cent from its recent low on June 24, and the US benchmark's rally means that its discount to Brent has narrowed further. The WTI-Brent price difference declined to 87 cents a barrel, the lowest since October 2010. Genscape, a consultancy that monitors refinery, pipeline and storage activity in the US, reported a fall in Cushing stocks of nearly 2m barrels in the four days to Tuesday, triggering buying of US crude. Analysts noted a scramble to buy back "short" or bearish positions among some traders who had thought that the rise in WTI had run its course for now. The Genscape numbers came after the US Department of Energy released data on Wednesday showing a fall of 6.9m barrels in US inventories* during the week to July 12, pushing the total crude outflow from the delivery hub over the past three weeks to 27m barrels. The rally in the US benchmark also means that returns for US and Canadian crude producers have more than doubled since the start of the year. Analysts said the WTI rally and fall in inventories were a result of the high demand from refineries which have been ramping up their processing of crude oil from North Dakota and Canada. According to the latest DOE data, refineries processed the largest volumes of crude in eight years because of increased refining capacity in the Gulf Coast. Refineries operated at a high level of 92.8 per cent of their operable capacity, the highest level in a year. ICE September Brent rose 18 cents to $108.79 a barrel, before trading down 3 cents at $108.59 a barrel. The fall in gasoline prices weighed on Brent, because European refineries ship gasoline to the US and lower margins implied a fall in European demand. An earlier version of this story referred to Cushing inventories