Crude prices surged on Wednesday as U.S. crude inventories declined sharply last week and risks of oil supplies disruption in the Middle East rose.

U.S. Energy Information Administration reported on Wednesday that crude inventories surprisingly dropped 200,000 million barrels in the week ended Feb. 10. Analysts had expected a moderate rise.

Besides, there was news said that Iran cut oil export to six European countries. Although Iranian Foreign Ministry denied the news, markets remained worried about oil supplies in the No.2 OPEC oil exporter. To add to risks of supplies disruption in the Middle East, an explosion hit a pipeline in Syria and a strike in Yemen has halted output at its largest oilfield.

But concerns about European debt problems and European recession limited the gains. Figures on Wednesday showed that euro zone's economy contracted 0.3 percent in the last quarter of 2011 and its largest member state Germany also saw economic downturn.

Light, sweet crude for March delivery gained 1.06 dollars, or 1. 05 percent to settle at 101.80 dollars a barrel on the New York Mercantile Exchange. In London, Brent crude also rose and last traded around 119 dollars a barrel.