By Polya Lesova & Moming Zhou, MarketWatch NEW YORK (MarketWatch) -- Oil futures rose Wednesday for a third straight session, as an industry group reported a drop in U.S. crude inventories and as the U.S. dollar turned lower, lifting dollar-denominated commodities prices. Crude inventories dropped by 4.37 million barrels during the week ended Nov. 13, the American Petroleum Institute reported late Tuesday. The dollar weakened after data showed U.S. consumer prices rose last month more than forecast. Crude oil for December delivery rose 39 cents, or 0.5%, to $79.53 a barrel in North American electronic trading. The contract, which expires at the end of trading on Friday, climbed as high as $80.23 earlier. Crude has gained more than 5% in the three sessions since Friday, when it ended at a one-month low. The weaker dollar "continues to provide support for the entire energy and commodity space," said Brian Niemiec, an analyst at Susquehanna Financial Group. "Crude has steadily moved higher after the API reported a significant inventory draw." The API report came as a surprise to the oil market. Analysts polled by Platts had expected a rise of 1.2 million barrels in crude inventories. Later in the morning, the Energy Information Administration will report its more closely watched inventories data. "Surprises [in the EIA data] cannot be ruled out either, given that during the past week, oil production in and shipments from the Gulf of Mexico were interrupted for several days due to Hurricane Ida," wrote analysts at Commerzbank. The EIA and the API use different criteria for measuring week-to-week changes in U.S. energy stockpiles. The API also reported motor gasoline inventories declined by 963,000 barrels, while distillate stocks rose by 507,000 barrels. Analysts polled by Platts projected an increase of 950,000 barrels in gasoline and a decline of 700,000 barrels in distillate inventories. In currencies, the dollar index (DXY 74.99, -0.38, -0.50%) was down 0.3% at 75.107. In other energy news, retail gasoline demand last week rose 2.1% in the U.S. from a year ago, according to media reports citing the MasterCard SpendingPulse report. "Market bulls may view this as an indication that demand recovery has started," the Commerzbank analysts said. "However, the increase is largely the result of a base effect, as gasoline demand faced a sharp decline last year." Also in energy trading, December gasoline rose 0.8% to $2.0217 a gallon, and December heating oil added 0.3% to $2.0636 a gallon. December natural gas lost 1.4% to $4.468 per million British thermal units. Elsewhere in the commodities markets, gold futures climbed to a record on Wednesday, as the dollar fell against other major currencies, polishing the investment appeal of the precious metal. Read more about gold's surge. Gold and oil are both denominated in U.S. dollars, so a weaker dollar makes the commodities less expensive for investors holding other currencies.

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