Drop in U.S. stockpiles supports oil price
U.S. crude oil prices rose to a three-week high above $73 a barrel Wednesday after a government report showed a larger-than-expected drop in oil and gasoline inventories.
The Energy Department reported that crude oil stockpiles fell 3.49 million barrels to 333.6 million in the week ended Aug. 24. Analysts surveyed by Bloomberg had pointed to a drop of 600,000 barrels. Gasoline supplies decreased 3.67 million barrels to 192.6 million, their lowest level in almost two years.
Crude oil for October delivery rose $1.78 to $73.51 a barrel in afternoon trading on the New York Mercantile Exchange.
Total of France closed a unit at its refinery in Port Arthur, Texas, because of a power cut, and there were earlier unplanned interruptions at plants run by Citgo Petroleum and Chevron. Other refiners are planning to make repairs next month, after the peak-demand summer driving season.
“Once we get past this last hurrah of the summer we could be looking at a big pullback, especially in September and October,” said Bill O’Grady, director of fundamental futures research at A.G. Edwards in St. Louis.
Gold and silver rose on speculation that a cut in U.S. interest rates could weaken the dollar.
“A lot of gold’s move in the short-term rests on interest rates,” said Ron Goodis, futures trading director at Equidex Brokerage Group in Closter, New Jersey. “A rate cut would be positive for gold.”
Gold futures for December delivery rose $1.90 to $675.40 an ounce on the Comex division of the New York Mercantile Exchange. Silver futures for December delivery gained 8.3 cents to $12 an ounce.
Copper futures rose in New York, erasing an earlier decline, as gains in the stock market eased concern that losses from subprime mortgages would spread to the wider economy.
Earlier in the session, copper had slumped as global inventories of the metal rose for a 10th straight session, the longest string of gains since January.
Inventories are at “very substantial levels,” Sahil Kapoor, an analyst at Kotak Commodity Services in Mumbai, said in a report.
Comex copper futures for December delivery rose 3.15 cents to $3.34 a pound.
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