Oil Rises as U.S. Gasoline Supplies Decline

Crude oil rose to a three-week high after a government report showed that U.S. gasoline inventories fell as demand strengthened and refineries cut operating rates.
TradingEconomics.com, Bloomberg 2/25/2009 12:34:24 PM

Gasoline supplies plunged 3.32 million barrels to 215.3 million barrels last week, the Energy Department said. Consumption of the motor fuel averaged 9 million barrels a day over the past four weeks, up 1.7 percent from the same period last year. Refineries operated at 81.4 percent of capacity, down 0.9 percentage point from the week before.

Crude oil for April delivery rose $2.48, or 6.2 percent, to $42.44 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures touched $42.78, the highest since Jan. 30. Prices are down 4.8 percent this year.

Gasoline futures for March delivery increased 8.15 cents, or 7.5 percent, to $1.1652 a gallon in New York. Futures reached $1.1758, the highest since Feb. 17.

The average U.S. pump price for regular gasoline dropped 0.9 cent to $1.891 a gallon yesterday, AAA, the nation’s largest motorist organization, said on its Web site. Prices have declined 54 percent from the record $4.114 a gallon reached in July.

Refineries are now operating at the lowest rate since the week ended Oct. 3, when the Gulf Coast was recovering from hurricanes Gustav and Ike, last week’s report showed. Operating rates were forecast to decline by 0.1 percentage point.

Inventories of crude oil rose 717,000 barrels to 351.3 million barrels, the department said. Supplies were forecast to increase by 1.25 million barrels.

Crude oil supplies at Cushing, Oklahoma, where New York- traded West Texas Intermediate crude is delivered, declined 358,000 barrels to 34.5 million barrels, the report showed. Stockpiles in the week ended Feb. 6 were the highest since at least April 2004, when the department began keeping records for the location.

The 11 members of the Organization of Petroleum Exporting Countries with quotas, all except Iraq, reduced output 3.8 percent to 25.3 million barrels a day in February, consultant PetroLogistics Ltd. of Geneva said Feb. 23. Members have a quota of 24.845 million barrels a day.

Brent crude oil for April settlement increased $1.67, or 3.9 percent, to $44.17 a barrel on London’s ICE Futures Europe exchange.