Oil rose to a seven week high after a U.S. government report showed that refinery operating rates climbed to the highest level since October, bolstering demand. Refinery utilization increased 0.7 percentage point to 81.9 percent in the week ended Feb. 26, the Energy Department said. Analysts surveyed by Bloomberg News forecast that there would be no change. Inventories of crude oil climbed 4.03 million barrels, more than three times what was estimated.
“Refinery run rates increased strongly, which should whittle down the huge oversupply of crude oil,” said Sean Brodrick, a natural resource analyst with Weiss Research in Jupiter, Florida. “This market just wants to go higher, even when there is bearish news.” Crude oil for April delivery increased $1.31, or 1.6 percent, to $80.99 a barrel at 11:40 a.m. on the New York Mercantile Exchange. Futures reached $81.23, the highest level since Jan. 12. Oil traded at $80 a barrel before the release of the inventory report at 10:30 a.m. in Washington.
Total U.S. fuel demand, averaged over the past four weeks, was 19.3 million barrels, up 3 percent from a year earlier, the department said. “We’re seeing a little demand improvement, which gives impetus to higher prices,” said Chip Hodge, who oversees a $9 billion natural resource bond portfolio as senior managing director at MFC Global Investment Management in Boston. “There continues to be optimism that economic growth will accelerate, and with it demand.”
Nationwide stockpiles of crude oil rose 1.2 percent to 341.6 million, the highest level since August, the report showed. It was the biggest gain since the week ended July 24.....Read the entire article.
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