Wednesday, April 14, 2010
Crude Oil Extends Gains on Unexpected Decline in U.S. Supply, Increase in Demand
Crude Oil climbed for a second day in New York after a U.S. government report showed an unexpected drop in supplies as gasoline demand increased the most in five years.
Oil rose 2.1 percent yesterday as crude stockpiles dropped 2.2 million barrels last week, the Energy Department said, the first decline in 11 weeks. Supplies were forecast to climb 1.3 million barrels, based on analyst estimates in a Bloomberg News survey. Gasoline use rose 1.3 percent in the four weeks ended April 9, the biggest gain since August 2004.
“The draw in crude was unexpected by the market and is a bit of a release because we have had so many weeks of builds, along with stronger imports into the U.S.,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “Demand for gasoline was also up.” Crude oil for May delivery gained as much as 37 cents, or 0.4 percent, to $86.21 a barrel and was at $86.12 in electronic trading on the New York Mercantile Exchange at 9:25 a.m. Singapore time. Yesterday, the contract gained $1.79 to settle at $85.84, ending a five day decline.
U.S. gasoline consumption climbed 119,000 barrels in the four weeks ended April 9 to 9.14 million barrels a day, the Energy Department said. That’s the highest level since October. The dollar traded at $1.3661 per euro from $1.3653 yesterday. A weaker dollar makes commodities more attractive as an alternative investment.
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