Oil jumps after unexpected gasoline-supply decline

Thursday, July 31, 2008 at 1:07am

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.

‘Eye-opening’ number

“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

Filed under: City Business
By: oyharward on 12/31/69 at 6:00

Finally, I understand. The Democrat Party team on Capitol Hill led by the Reid/Pelosi team has made a decision that Republican legislation for new oil drilling in productive areas will not be allowed to be voted on in the US Congress and/or the US Senate. The Republican legislation is to make America oil independent. The Democrat refusal to allow this vote is a vote against some 70% poll approval of drilling for oil, supported by Americans. Capitol Hill Democrats are ruling more like a Socialist and/or Communist system rather than an open Democracy. Obama, apparently, is supporting the Democrats’ leadership decision. The Democrats continue to punish the American consumers with extremely high gasoline prices; causing other consumer goods to be met with escalating prices, also. In addition, the Democrats decision to refuse for new oil is costing our total economy in existing jobs as well as newer jobs. Democrats say they want to allow more drilling; however, their decision is to allow drilling in dry, empty, or less productive locations. American voters must remember on November 4 and hold Democrats directly responsible. Just say “NO” to Democrats on Capitol Hill! Consumers have been punished enough.

By: queent on 12/31/69 at 6:00

The President don't have to worry about nothing, so he don't care let him come down to earth and see what he have to pay. I know he won't because he'll be taken care of the rest of his life. I can't stand that man he is the reason why everything is going wrong alone with congress not doing nothing.

By: RTungsten on 12/31/69 at 6:00

^ F+ for grammar

By: revo-lou on 12/31/69 at 6:00

Ah, oy-vey talks out of his oy-arse again. Exxon posted RECORD profits for the first quarter of almost 12 BILLION dollars. Yeah, oy-vey, you dumbarse, Congress helped them get it!!!!!!! The continuous ignorance of some people is a never ending source of understanding as to why this country is sink fast!

By: revo-lou on 12/31/69 at 6:00

Think about this way, if you can actually think oy-vey, we as a country have greatly REDUCED the mile we drive, and the amount of oil we have used. With us so far? Now, that has seen a 25 +/- dollar DROP in the price of oil. Still hanging in there? Who do you think controls the flow of gasoline? I’ll give you a hint cause I know that this is getting a little complicated for you. It is of course the oil companies. Now, if they wanted to turn the “slide” (it is not really a slide because the price was artificially inflated to begin with) of the price of oil around, what better way than to say, “we are short on gas”? Is it becoming a little clearer for you now oy-vey? No, I didn’t think so, you are just too stupid.

By: frogmild on 12/31/69 at 6:00

This makes a very clear picture of the power of the crazy SOB's in congress. Bush finally gets off his butt and removes the presidential block on drilling in the gulf and the price takes a drastic dip on the world market. Pelosi and Reid prevent a vote and removal of the congressional road block and the price of iol takes a big leap upward. Can there be any real questions that the nuts have an agenda to maintain their power even if it means destroying this country and our way of life. Can anyone with an active brain cell possibly justify support for a current politician from either side of the aisle? Democrats are the worst when it comes to mean spirited craziness but the Republicans overdosed on whimpishness.

By: revo-lou on 12/31/69 at 6:00

I hope we get full democrat power just so you nut jobs die off!

By: Blanketnazi2 on 12/31/69 at 6:00

OK, instead of drilling in ANWR, why not use our own gas supplies rather than exporting them?

By: monitorman on 12/31/69 at 6:00

Precisely!What makes any of you think that all the oil produced by more drilling will be sold in this country?It will be sold on the world market.The oil companies already have over 300 million acres of leases which they don't use. Giving them more is just a prop to their assets, their "value."