Oil Trades Near $72 After Crude Supplies Drop Most in 15 Months

Aug. 20 (Bloomberg) -- Crude oil traded little changed near $72 a barrel after a government report showed U.S. inventories declined the most in 15 months as imports tumbled and refineries increased operating rates.

Oil surged as much as 5.2 percent yesterday after crude stockpiles dropped 8.4 million barrels last week, the most since the week ended May 23, 2008, an Energy Department report showed. Imports slipped 1.41 million barrels a day to 8.11 million, the biggest drop and lowest rate since September when hurricanes struck the Gulf of Mexico coast.

Oil received “a shot of adrenaline” from the inventory report, said Mike Sander, an investment adviser with Sander Capital in Seattle. “The report showed a gigantic drop in crude oil and petroleum stocks. Such a drop can partially be blamed on a 1.4 million barrel drop in oil imports.”

Crude oil for September delivery traded at $72.48 a barrel, up 4 cents, on the New York Mercantile Exchange at 8:16 a.m. Singapore time. Yesterday, the contract climbed $3.23 to settle at $72.42. Prices are up 62 percent this year.

The September contract expires today. The more-active October contract was at $73.87 a barrel, up 4 cents.

U.S. crude inventories dropped to 343.6 million barrels and gasoline supplies declined 2.12 million barrels, the Energy Department report showed.

Refineries operated at 84 percent of capacity last week, up 0.5 percentage point from the prior week, the department said.

Oil also gained as the dollar declined against other currencies, increasing the appeal of commodities to investors looking for an inflation hedge. The dollar fell 0.7 percent versus the euro to $1.4231, from $1.4136 yesterday.

Gasoline Supplies

Gasoline inventories dropped 2.18 million barrels to 209.8 million, the fourth-straight decline, according to the report. Supplies were 3.8 percent higher than revised numbers for a year earlier.

Gasoline for September delivery was at $2.0410 a gallon, up 0.64 cent, in New York. The contract yesterday rose 3.44 cents, or 1.7 percent, to end the session at $2.0346 a gallon.

Crude-oil supplies were forecast to increase 1.2 million barrels, according to the median of 13 analyst responses in a Bloomberg News survey. Gasoline stockpiles were forecast to decline 1 million barrels.

Brent crude oil for October settlement was at $74.58 a barrel, down 1 cent, on the London-based ICE Futures Europe Exchange at 8:37 a.m. Singapore time. The contract rose $2.22, or 3.1 percent, to end yesterday’s session at $74.59 a barrel.