Crude oil rose more than $4 a barrel, the biggest gain since July 10, after the U.S. Energy Department reported the first decline in gasoline inventories in five weeks.
Supplies fell 3.5 million barrels to 213.6 million barrels last week, the department said yesterday. Stockpiles were forecast to rise 350,000 barrels, according to a Bloomberg News survey. Crude supplies fell less than forecast and inventories of distillate fuel, a category that includes heating oil and diesel, rose.
“We are focused on the gasoline number because it had the greatest variance from expectations,” said Tim Evans, an energy analyst for Citi Futures Perspective in New York. “This is the first bullish gasoline news in weeks.”
Crude oil for September delivery rose $4.58, or 3.8 percent, to settle at $126.77 a barrel on the New York Mercantile Exchange, the highest close since July 22. Futures touched $120.42 a barrel yesterday, the lowest since May 6. Prices are up 65 percent from a year ago.
U.S. fuel consumption averaged 20.2 million barrels a day in the past four weeks, down 2.4 percent from a year earlier, the department said.
Gasoline demand in the U.S. peaks during the summer, when Americans take to the highways for vacations. The so-called driving season lasts from the Memorial Day weekend in late May to Labor Day in early September.
“The gasoline number is eye-opening,” said Rick Mueller, director of oil markets at Energy Security Analysis Inc. in Wakefield, Mass. “It’s getting most of the attention, but the driving season is coming to an end with only one month left and supplies are still ample.”
The drop in gasoline inventories last week left stockpiles 3 percent higher than the five-year average for the period, the department said.
Gasoline for August delivery rose almost 13 cents, or 4.2 percent, to settle at about $3.13 a gallon in New York, the highest close since July 22. It was the biggest one-day increase since June 11. Prices touched $2.98 yesterday, the lowest since May 5. Futures reached a record $3.63 a gallon on July 11.
Pump prices are following changes in futures. Regular gasoline, averaged nationwide, fell 1.5 cents to $3.93 a gallon, AAA, the nation’s largest motorist organization, said on its Web site. Prices reached a record $4.11 a gallon on July 17.
“Gasoline has been the weakest link in the energy complex,” said Kyle Cooper, an analyst at IAF Advisors in Houston. “The gasoline number is a little bright light for the bulls, because otherwise the report is pretty bearish.”
— Bloomberg News