Shares of oil producers and oilfield service providers rose Wednesday on news of a higher than expected drop in U.S. crude oil and gasoline inventories.

The U.S. Energy Administration reported that U.S. crude oil stocks fell 3.5 million barrels in the week to Aug. 24, while gasoline inventories dropped 3.6 million barrels to 192.6 million barrels, the lowest level since Sept. 9, 2005. Analysts had expected crude stocks to fall 2.7 million barrels and gasoline, 2.6 million barrels.

At 333.6 million barrels, U.S. crude oil inventories remain well above the upper end of the average range for this time of year, the report said, but gasoline stocks were well below the lower end of the average range. The current inventories are only enough to last for 20 days at the average rate of demand over the past four weeks, the lowest level since the Energy Department began compiling the measure in March 1991.

Refinery utilization dropped to 90.3% of capacity from 91.6% in last week's report; analysts had expected an increase of 1.5 percentage points.

Refiners in the U.S. have struggled to keep up during the peak summer driving season.

“It reflects that we continue to underestimate our demand for energy,” said W. Ray Whitman, a partner at the Houston law firm Baker & Hostetler who focuses on the energy industry.

Whitman said demand levels suggest energy prices at the pump will remain at current levels, or increase, in the near term.

While demand should begin to drop with the upcoming Labor Day weekend heralding the end of vacation season, fall is the period when refineries take units offline to make repairs.

"It may take down supply,” said Bob Thomas, head of the energy section at Porter & Hedges, a Houston-based law firm, “but history would teach us the people who predict oil and natural gas prices are usually proven wrong.”

Energy was one of the leading sectors in Wednesday trading (See "Uncertain Markets Make Money Too"), with oilfield services companies like Halliburton (nyse: HAL - news - people ) gaining 2.6%, or 85 cents, to $33.71, and Forster Wheeler (nasdaq: FWLT - news - people ) rising 4.1%, or $4.47, to $114.65.

Exxon Mobil (nyse: XOM - news - people ) rose 2.7%, or $2.23, to $85.23, ConocoPhillips (nyse: COP - news - people ) jumped 3.8%, or $2.96, to $81.77, and Chevron (nyse: CVX - news - people ) climbed 2.9%, or $2.40, to $86.70.

AFX contributed to this article.