NEW YORK – Oil rose in New York on an unexpected drop in U.S. inventories as imports declined for the fourth time in five weeks and petroleum consumption increased.
Prices gained as much as 1.2 percent after the Energy Information Administration, the Energy Department’s statistical arm, said stockpiles fell 951,000 barrels last week. They were expected to climb 2.2 million barrels, according to the median of 11 analyst estimates in a Bloomberg survey. Consumption rebounded from the lowest level since March.
“The drawdown in crude oil caught the market by surprise,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “Supplies are becoming tighter than expected.”
West Texas Intermediate crude for February delivery climbed 66 cents, or 0.7 percent, to $93.94 a barrel at 1:20 p.m. on the New York Mercantile Exchange. Prices have risen 2.3 percent since the beginning of the year. Volume was 28 percent above the 100-day average.
Brent for February settlement, which expires today, gained 11 cents to $110.41 a barrel on the London-based ICE Futures Europe exchange. The more-active March contract decreased 21 cents to $109.42. Volume was 0.5 percent below the 100-day average.
The front-month European benchmark contract was at a premium of $16.47 to WTI and poised to settle at the narrowest spread since Sept. 19.
Crude stockpiles
Oil inventories decreased to 360.3 million in the seven days ended Jan. 11 as imports fell 3.7 percent to 8.03 million barrels a day, the EIA said in the weekly report. Imports jumped 18 percent the previous week, following a 12 percent drop in the week ended Dec. 28.
Companies in Gulf Coast states delay imports and minimize supplies at the end of the year to reduce local taxes. Those imports were brought ashore in the first week of the new year, Flynn said.
“Oil imports are the most volatile series” in the EIA report, said Tim Evans, an energy analyst at Citi Futures Perspective in New York. The drop in imports “resulted in a net decline in crude oil inventories.”
Total petroleum consumption rebounded from the lowest level since March, climbing 1.1 percent to 18 million barrels a day last week, the report showed. Gasoline demand jumped 3.9 percent to 8.32 million barrels a day.
The EIA also reported that U.S. domestic production climbed to 7.04 million barrels a day, the highest level since January 1993.
A combination of horizontal drilling and hydraulic fracturing, or fracking, has unlocked supplies trapped in shale formations in states including North Dakota, Texas and Oklahoma.
Stocks at Cushing, Oklahoma, the delivery point for WTI futures, gained 1.78 million barrels to a record 51.9 million. Inventories may fall this week after the Seaway pipeline, which ships oil from Cushing to the Gulf Coast, resumed service on Jan. 11 at an increased capacity of 400,000 barrels a day from 150,000.
Gasoline stockpiles rose 1.91 million barrels to 235 million, the EIA said. Analysts had expected a gain of 2.7 million, according to the Bloomberg survey. Distillate fuels, which include heating oil and diesel, grew 1.67 million to 132.4 million barrels. They were forecast to increase 1.5 million.
“We are seeing momentum to the upside on the surprising drop in crude inventories,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. “But it may be short-lived due to the build in gasoline and heating oil.”
Refineries operated at a rate of 87.9 percent, down from the previous week’s 89.1 percent, the EIA report showed.
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OPEC production
The Organization of Petroleum Exporting Countries cut output by 465,000 barrels a day in December to 30.4 million, the lowest level since October 2011, led by a reduction in Saudi Arabia, the group said today in its monthly report, citing secondary sources.
That’s 800,000 barrels a day more than the average 29.6 million that the group estimates it will need to supply this year. OPEC kept its 2013 global demand forecast unchanged.
