KPBN News

Oil Jumps on Drop in U.S. Gasoline Stockpiles



The US benchmark, West Texas Intermediate (WTI) for April delivery, surged $1.49 (4.9 percent) to end at $37.99 a barrel on the New York Mercantile Exchange, its highest level in more than three months. In London, Brent North Sea crude for May delivery, Europe's benchmark for oil, jumped to settle at $41.07 a barrel, up $1.42 (3.6 percent) from Tuesday's close. The US Department of Energy's (DoE) weekly petroleum supplies report Wednesday showed that commercial crude oil inventories rose by 3.9 million barrels to 521.9 million barrels in the week ending March 4. CMC Markets analyst Jasper Lawler said the increase in crude oil was `well below last week's surprise inventory build of 10.4 million barrels.` More significantly, gasoline supplies fell by 4.5 million barrels, three times more than expected. And distillate supplies, which include diesel and heating oil, dropped by 1.1 million barrels, rather than rising by the predicted 900,000 barrels. `The gasoline draw was more than what traders were looking for, that's definitely been somewhat supportive,` said Oliver Sloup of iiTrader.com. Sloup said the European Central Bank's (ECB) policy meeting Thursday was adding some support to the commodity, amid expectations the ECB will announce fresh stimulus measures for the sluggish eurozone. He said a larger-than-anticipated stimulus package would likely put downward pressure on the euro and lift the dollar, `which could potentially put some short-term support underneath crude`, which is priced in dollars, according to AFP. (Uu.A026)