Updated from 1:38 p.m. ESTOil prices cleared $63 a barrel Thursday as the markets refocused on threats to oil supplies and a larger-than-expected drop in natural gas stockpiles. Crude closed at a three-week high of $63.36 a barrel, up $1.39 on Nymex. The contract rose 56 cents on Wednesday despite an Energy Department report showing that crude stockpiles rose by 1.6 million barrels last week. There is 9% more crude in storage now than there was last year. Unleaded gasoline gained 7 cents to $1.69 a gallon and heating oil moved up 5 cents to $1.80 a gallon. Russian and Iranian negotiators have been meeting this to finalize details over a plan to jointly enrich uranium in Russia. The two sides are trying to head off a potential trade embargo the U.N. Security Council may impose on Iran for its nuclear development plans. European Union leaders will hold an unscheduled meeting with Iran tomorrow to resume negotiations before the board of the International Atomic Energy Agency meets next week. Iran recently restarted small-scale uranium enrichment in defiance of Western threats of economic sanctions. OPEC's second largest crude producer needs nuclear power to generate more electricity, though the West believes the move is a ruse to build nuclear weapons. Militants in Nigeria, who have cut that country's daily oil production by 20%, released six of their nine hostages, but threatened renewed attacks. Rebels want a share of the wealth generated from producing 2.5 million barrels of crude per day. Natural gas eked out a two-cent increase to $6.76 per million British thermal units after the Energy Department said fuel stockpiles fell by 171 billion cubic feet to 1.9 billion cubic feet last week. Analysts polled by Bloomberg had expected a drawdown of 155 billion cubic feet. There is 21% more natural gas in storage now than last year, and 48% more than the average over five years. The larger-than-expected drop was attributed to colder weather across the country last week. When temperatures plunge, consumers and companies crank up their furnaces and use more natural gas. But frigid temperatures won't be enough to draw down stockpiles. "The recent cold snap seems more like a last hurrah for Old Man Winter, and with barely a few weeks left in the winter season, inventories for natural gas remain in near record territory," said Rakesh Shankar, an energy analyst with Economy.com in West Chester, Pa. "This will ensure that any price gains for natural gas in the aftermath of today's report will be limited." On Wednesday, natural gas, which is also used to generate electricity, closed at nearly a one-year low. Although the Northeast has been experiencing lower temperatures over the past two weeks, the cold is too little too late for gas bulls. There is only around four weeks left of the winter heating season and more than enough natural gas to ride out any cold snaps. Energy shares were rallying today thanks to the spike in crude. The Philadelphia Oil Service Sector Index was inching up 2.2%, while the Amex Natural Gas Index and the Amex Oil Index were each up about 1%. Shares of oil rig operators were moving up on a rash of $1 billion plus deals. GlobalSantaFe ( GSF) said it inked a $1 billion deal with an undisclosed customer to build and rent a new ultra deepwater rig over seven years. Transocean ( RIG) signed a $1.7 billion, five-year contract with Chevron ( CVX) to build and rent a deepwater rig. Transocean also signed a three-year contract with Reliance Industries to provide offshore drilling work in India for an estimated $522 million. Shares of GlobalSantaFe rose $1.63, or 2.9%, to $57.70, while Transocean was up $1.75, or 2.3%, to $78.95.