HOUSTON, June 28 -- The American Petroleum Institute (API) on Tuesday reported a decrease of 3.799 million barrels of crude oil in U.S. inventories for the week ending June 24.

Analysts expected a drop of about 0.11 million barrels for this week.

The API reported an increase of 5.607 million barrels in the previous week.

U.S. oil prices advanced on Tuesday, their third consecutive session of gains, as a slew of news fueled supply concerns.

The West Texas Intermediate for August delivery added 2.19 U.S. dollars, or 2 percent, to settle at 111.76 dollars a barrel on the New York Mercantile Exchange. Brent crude for August delivery increased 2.89 dollars, or 2.5 percent, to close at 117.98 dollars a barrel on the London ICE Futures Exchange.

The oil rally came as traders kept a close eye on the supply side.

Libya's state-owned National Oil Corporation on Monday said it was considering declaring a state of force majeure in the Gulf of Sirte region within 72 hours unless production and shipping are resumed.

"This threatens to further reduce Libyan oil production, which has already fallen by roughly half to around 600,000 barrels per day as a result of protests," Carsten Fritsch, energy analyst at Commerzbank Research, said Tuesday in a note.

Elsewhere, Ecuador's Energy Ministry said Sunday that the country could suspend oil production in 48 hours if the nationwide indigenous protests and road blockades continue.

Traders also awaited data on U.S. crude stockpiles as the Energy Information Administration is set to release its weekly petroleum status report on Wednesday.

  - Xinhua