Energy Futures Rise After Dispirited Supplies Of Crude

Energy futures rose Wednesday after the government said supplies of crude and heating oil fell sharply last week while gasoline inventories jumped.

In its weekly inventory snapshot, the Energy Department's Energy Information Administration reported crude supplies dropped by 7.6 million barrels last week, much more than the 1.5 million barrel decline analysts surveyed,had expected.

Traders expect crude supplies will rebound in next week's report, which will reflect deliveries that were delayed by the fog. Meanwhile, investors were focusing on other aspects of the report, which were mixed. For instance, heating oil supplies dropped by 2.1 million barrels last week, much more than the expected 500,000 barrel decline. But gasoline inventories jumped by 3 million barrels, more than the 700,000-barrel increase analysts had expected.

Light, sweet crude for February delivery rose $1.16 to settle at $91.24 a barrel on the New York Mercantile Exchange. MCX Crude Oil closed the session at Rs 3597 per barrel up Rs 67.

Crude supplies at the closely watched Nymex delivery terminal in Cushing, Okla., rose by about 100,000 barrels last week to 17.4 million barrels Still, the increase pressured prices. Falling supplies there are seen as a symptom of a tight market, and those concerns ease when Cushing inventories rise, as they have for several weeks. Other energy futures were mixed. January gasoline rose 2.76 cents to settle at $2.3319 a gallon on the Nymex, and January heating oil rose 4.25 cents to settle at $2.5979 a gallon.

But January natural gas rose 3.8 cents to settle at $7.179 per 1,000 cubic feet on the Nymex. In London, February Brent crude rose $1.36 to settle at $91.48 a barrel on the ICE Futures exchange. Oil prices have since fallen as OPEC boosted production and several forecasters lowered their predictions about how fast demand for oil and gasoline is growing.

Freight rates charged by the large tankers that bring oil from the Persian Gulf to the U.S. have jumped recently, a sign that Organization of Petroleum Exporting Countries oil exports continue to rise. Wednesday's EIA report meanwhile shows that gasoline demand fell by about 61,000 barrels last week and was up only 0.3 percent over the past four weeks compared with the same period last year, the EIA said. Analysts consider demand growth under 1.5 percent to be low.

The EIA also reported that refinery activity fell by 1 percent last week to 87.8 percent of capacity. Analysts had expected refinery activity to grow by 0.3 percentage point to 89.1 percent of capacity. While crude imports fell last week, gasoline imports rose by 123,000 barrels a day to an average of 1.1 million barrels a day.