Oil hit five-week high on distillate inventory drop

11:09, February 19, 2010      

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Oil prices rallied to the highest level in five weeks of above 79 U.S. dollars on Thursday as distillate fuel stockpiles dropped more than expected.

The U.S. Energy Information Administration reported on Thursday that crude supplies rose by 3.1 million barrels in the week ended on February 12, larger than expected. Meanwhile, gasoline inventory rose by 1.7 million barrels, largely in line with expectations.

However, distillate fuel, which includes diesel and heating oil, decreased by 2.9 million barrels last week, much more than average forecasts. The drop in distillates added to the speculation that energy consumption could pick up as cold weather hit the eastern United States.

Meanwhile, concerns about a potential gasoline supply shortage offered support to oil prices. The EIA reported a 379,000-barrel-a- day drop in gasoline output to 8.4 million barrels last week, while gasoline imports fell 459,000 barrels a day to 709,000 barrels.

Light, sweet crude for March delivery gained 1.73 dollars to settle at 79.06 dollars a barrel on the New York Mercantile Exchange.

In London, Brent crude for April settlement rose 1.47 dollars to 77.74 dollars a barrel on the ICE Futures Exchange.

Source: Xinhua
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