Crude prices gain on surprise drop in US stockpiles

A weaker dollar pushed the price of crude oil past $80 per barrel Wednesday, while prices were also boosted by a surprise decline in US crude oil and gasoline stockpiles last week.

The US Energy Information Administration reported that crude oil inventories, which had been expected to rise by 1.3 million barrels in the week ending 30 October, instead dropped by 4 million barrels to 335.9 million barrels, while gasoline stockpiles dropped by 300,000 barrels and distillates in storage fell by 400,000 barrels during the week.

Distillates inventories didn’t drop as much as had been anticipated.

The rise in prices came even though gasoline demand is even with last year’s weak demand, while the demand for jet fuel and other distillate fuels is down, with the EIA reporting that refiners are continuing to cut their output.

December contracts for West Texas Intermediate crude were 80 cents higher to $80.40 per barrel on the New York Mercantile Exchange, while December Brent crude added 87 cents to $78.98 per barrel on the ICE Futures Europe exchange in London.

Nymex December gasoline and heating oil futures were up slightly, while Decmeber natural gas futures were lower by nearly 20 cents per 1,000 cubic feet.

The retail price of gasoline was down 0.2 cent to $2.682 per gallon on average in the United States, the fifth day in a row of declines, but prices at the pump remained over 22 cents higher than last month.