EIA: Crude stockpiles drop by 8.4 million barrels

Crude oil prices jumped Wednesday after the US Energy Information Administration reported that crude oil inventories in the United States fell unexpectedly as imports were down to their lowest level in nearly a year.

Some analysts said that the drop in inventories could have been caused by companies holding supplies offshore until prices go higher.

The EIA said that crude oil stockpiles dropped by 8.4 million barrels to 343.6 million barrels in the week ending 14 August, but even with the large draw down, inventories were still 37.7 million barrels above the same week last year.

Additionally, gasoline stockpiles fell by 2.1 million barrels to 209.8 million barrels and distillates in storage were down by 700,000 barrels to 161.6 million barrels.

The decline in inventories, according to some analysts, show that demand for oil and oil products is up, but with imports down 9.5 percent last week, that conclusion could be premature.

Still, the American Petroleum Institute, an oil industry trade association, claimed that demand was only down 3 percent in July compared with the same month last year, less of a drop than the average for the first half of the year.

September contracts for West Texas Intermediate crude was up $3.23 to $72.42 per barrel on the New York Mercantile Exchange, but with those contracts due to expire tomorrow, October contracts saw more action and were up $2.47 to $73.83 per barrel.

Brent crude gained $1.86 to $74.23 per barrel on the ICE Futures Europe exchange in London.

Nymex September gasoline futures were up 3 cents to $2.03 per gallon while September heating oil added 5 cents to $1.92 per gallon and September natural gas gained 2 cents to $3.12 per million British thermal units.