Oil Rises Above $71 as Inventories Fall


"July crude rose $1.32, or 1.9%, to end at $71.33. . .highest level for a front-month contract since Oct. 20."

Crude-oil futures rose on Wednesday, ending above $71 a barrel for the first time in more than seven months, after government data showed a surprising drop in last week's inventories, as imports fell and gasoline demand picked up.

Crude inventories fell by 4.4 million barrels in the week ended June 5, the Energy Information Administration reported. Analysts surveyed by energy information provider Platts had expected an increase of 800,000 barrels.

After the data, July crude rose $1.32, or 1.9%, to end at $71.33 a barrel on the New York Mercantile Exchange, closing at the highest level for a front-month contract since Oct. 20.

Crude imports fell 676,000 barrels a day from the previous week, while gasoline demand over the past four weeks rose 0.4% from the same period last year, the report showed.

The EIA also said crude inventories at Cushing, Okla., the delivery point for Nymex futures, fell 900,000 barrels to 29 million. Meanwhile, gasoline inventories fell 1.6 million barrels, and distillate stockpiles declined 300,000 barrels.

Refineries operated at 85.9% of their operable capacity last week, slightly lower than a week ago.

"This is a clearly bullish report," said James Williams, an economist at energy research firm WTRG Economics. "The decline in crude, gasoline and distillate stocks should add to the current feeding frenzy in petroleum speculation."

Late Tuesday after crude's floor trading closed, the American Petroleum Institute reported crude inventories fell 5.96 million barrels to 357.9 million last week.

Also on the Nymex, July reformulated gasoline rose 4.86 cents, or 2.5%, to $2.0153 a gallon, and July heating oil added 2.5 cents, or 1.4%, to $1.8326 a gallon.

July natural-gas futures fell 2.3 cents, or 0.6%, to $3.708 per million British thermal units.

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