Crude oil rose after a government report showed that U.S. inventories unexpectedly dropped as imports declined to a two month low. Stockpiles of crude oil fell 3.94 million barrels to 335.9 million last week, the Energy Department said today. A 1.5 million barrel gain was forecast, according to the median of responses in a Bloomberg News survey of analysts. Oil also advanced as equities gained and a weaker U.S. dollar bolstered the appeal of commodities as an alternative investment.
“The inventory report today was definitely supportive,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “Prices were already up because of the weak dollar and rising stocks. These numbers just added to the upward momentum.”
Crude oil for December delivery rose 59 cents, or 0.7 percent, to $80.19 a barrel at 2:12 p.m. on the New York Mercantile Exchange. Futures touched $81.06, the highest since Oct. 26. Prices are up 80 percent this year. Oil traded at $80.13 before the release of the supply report at 10:30 a.m. in Washington. “It is very hard to justify oil going from $30 to above $80 based only on the fundamentals of supply and demand,” Nouriel Roubini, the economist who predicted the global economic crisis, said today at the Inside Commodities Conference in New York. Oil touched $32.40 in December. Current prices are “in part” a bubble.....Read the entire article.
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