Crude Oil Advances After Unexpected Decline in U.S. Stockpiles

Crude oil rose to a three week high after the government reported an unexpected decline in U.S. stockpiles and applications for unemployment benefits fell, bolstering optimism that the economic recovery will accelerate. Supplies dropped 1.85 million barrels to 359.9 million in the week ended Sept. 3, the Energy Department said today in a weekly report. Inventories were forecast to climb by 1 million barrels, according to a Bloomberg News survey of analysts. Initial jobless claims fell by 27,000 to 451,000 in the week ended Sept. 4, Labor Department figures showed.

“The oil statistics today were bullish to neutral,” said Carl Larry, president of Oil Outlooks and Opinions LLC in Houston. “The economic numbers, in particular the jobless claims, were an encouraging sign. The main driver of the market right now is the economy.” Crude oil for October delivery rose 94 cents, or 1.3 percent, to $75.61 a barrel at 11:23 a.m. on the New York Mercantile Exchange. The contract reached $75.96, the highest level since Aug. 19.

Brent crude oil for October settlement climbed 19 cents to $78.36 a barrel on the London based ICE Futures Europe exchange. Gasoline supplies declined 243,000 barrels to 225.2 million. Stockpiles were forecast to fall 1 million barrels, according to the median of 16 responses from analysts surveyed by Bloomberg News. Initial jobless claims dropped by 27,000 to 451,000, Labor Department figures showed today in Washington. Benefits applications were projected to decrease to 470,000 from a previously reported 472,000 for the prior week, according to the median forecast of 46 economists in a Bloomberg News survey.....Read the entire article.

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