Fall in US crude inventory surprises markets

A decline in US crude oil stockpiles surprised experts and sent crude oil futures up more than a dollar per barrel on Wednesday.

In late afternoon trading in London, IPE Brent for July went up $1.40 to $50.22 per barrel. In early afternoon trading on the New York Mercantile Exchange, meanwhile, West Texas Intermediate July delivery contracts rose $1.48 to $51.15 per barrel.

The decline in inventory has been blamed on a slowdown in crude oil imports, which fell by 548,000 barrels per day to 10.31 million barrels per day, as well as on a rising demand for crude be refineries, up 319,000 barrels per day to 15.84 million barrels per day.

The increase in refining had to do with anticipation of higher gasoline demand during the summer driving season, which begins this weekend. 37.2 million Americans are expected to travel over the holiday weekend, 84 percent of them by automobile.

The weekly report on inventories from the US Department of Energy showed that crude oil inventories were down by 1.6 million barrels in the week ending on May 20, to 332.4 million barrels.

It was only the second weekly decline in fifteen weeks and came as a surprise, as inventories had been expected to rise by 1.3 million barrels.