Oil rises to five-week high in NY

Crude oil rose to a five-week high in New York on speculation US gasoline stockpiles had fallen as refiners reduced production.

A US government report is expected to show supplies of the motor fuel declined 1.3 million barrels last week as refinery operating rates fell to a two-month low, according to a survey of 15 analysts.

US gasoline sales dropped for a second week, MasterCard Inc said on Wednesday (local time).

"Traders are buying oil on expectation of bullish fuel inventory data in the Energy Department report," said Anthony Nunan, assistant general risk manager at Mitsubishi Corp in Tokyo. "Most are expecting a further drawdown in gasoline stocks, which are already at a very low level."

Crude oil for October delivery climbed as much as 53 cents, or 0.7 percent, to $76.26 a barrel in after-hours electronic trading on the New York Mercantile Exchange. That was the highest intraday price since August 3. Oil traded at $76.17 a barrel at 1:49 pm in Singapore.

The contract rose 65 cents, or 0.9 percent, to $75.73 yesterday, the highest close since August 2. Prices rose 2 percent the previous two sessions as Hurricane Felix neared the Gulf of Mexico before striking Nicaragua and Honduras and weakening to a tropical depression.

"We should have seen a decline because the hurricane premium was eroding," James Ritterbusch, of Ritterbusch & Associates in Galena, Illinois, said yesterday.

"This is a sign that the market has a lot of strength. We will be up around $77 before long."

Brent crude oil for October settlement gained as much as 59 cents, or 0.8 percent, to $74.93 a barrel on the London-based ICE Futures Europe exchange.

Futures traded at $74.76 a barrel at 1:40 pm Singapore time. It rose 0.6 percent on Wednesday.

US gasoline stockpiles held 192.6 million barrels on August 24, the lowest since September 9, 2005, and the equivalent to 20 days of supply, the lowest since the records began in 1991.

Gasoline for October delivery was at $2.0052 a gallon after adding 0.3 percent to $1.9965 yesterday. Heating oil was at $2.1115 a gallon after rising 1 percent to $2.09 yesterday.

US oil inventories held 333.6 million barrels on August 24, 10.8 percent more than the five-year average for the period.

Bloomberg News

(China Daily 09/07/2007 page16)