Oil Rises a Second Day on U.S. Economic Outlook, Supply Drop
Crude oil rose after a government report showed that U.S. gasoline inventories declined as fuel consumption surged to a 16-month high.
Gasoline supplies fell 2.65 million barrels to 219 million, the lowest level this year, the Energy Department said. Stockpiles were forecast to drop by 500,000 barrels, according a Bloomberg News survey of analysts. Fuel demand rose 1.6 percent to 20 million barrels a day, the highest level since Jan. 30, 2009. Equities fell and the dollar climbed against the euro.
“We’re getting good support from the gasoline market,” said Jim Ritterbusch, president of Ritterbusch & Associates, a Galena, Illinois, consulting firm. “The DOE reported a gasoline draw of more than 2.5 million barrels. This has enabled us to shrug off the stock market’s weakness and dollar’s strength.”
Crude oil for July delivery increased $1.59, or 2.2 percent, to $74.45 a barrel at 2:22 p.m. on the New York Mercantile Exchange. Oil traded at $72.96 before the release of the inventory report at 11 a.m. in Washington.
Gasoline surged 5.56 cents, or 2.7 percent, to $2.0817 a gallon in New York. The fuel touched $2.0841, the highest level since May 18.
The dollar strengthened to $1.217 per euro, up 0.6 percent from $1.2249 yesterday. The common currency has slumped 15 percent against the greenback this year as concern mounts that Greece’s debt crisis may spread to other nations using the euro. The Standard & Poor’s 500 Index slipped 0.2 percent to 1,095.95.
Supplies of crude oil fell 1.9 million barrels to 363.2 million last week, according to the department. Inventories were forecast to be unchanged, according to the median of 17 analyst estimates in a Bloomberg News survey.
‘Sign of Improvement’
“Demand rose above 20 million barrels a day for the first time since January last year,” said Kyle Cooper, managing director at IAF Advisors in Houston. “Demand is still weak for this time of year by historical standards, but this is a definite sign of improvement.”
Fuel use during the last week of May exceeded 21 million barrels a day in 2006 and 2007.
Consumption of all fuels climbed 8.1 percent to 19.7 million barrels a day from a year ago in the four weeks ended May 28, according to the Energy Department.
Brent crude for July settlement gained $1.46, or 2 percent, to $75.21 a barrel on the London-based ICE Futures Europe exchange.