Oil Trades Near $72 After Supplies Drop to Lowest Since January

Sept. 17 (Bloomberg) -- Oil traded near $72 a barrel in New York after the U.S. Energy Department reported that stockpiles of the fuel in the biggest energy consuming nation dropped to the lowest level since January.

Crude inventories fell 4.73 million barrels, the weekly report showed yesterday, more than the 2.5 million-barrel decline forecast in a Bloomberg News analyst survey. Prices also gained as the dollar declined to the weakest level in almost a year and as U.S. equities advanced.

The supplies report showed “decreased inventory levels for crude and petroleum,” said Mike Sander, an investment adviser at Sander Capital in Seattle. “The dollar continues to hit new lows and equities markets are rallying, giving support to the renewed global economy which will consume more oil.”

Crude oil for October delivery was at $72.41 a barrel, down 10 cents in electronic trading on the New York Mercantile Exchange at 10:17 a.m. in Sydney. Yesterday, the contract rose $1.58, or 2.2 percent, to $72.51. Futures are up 62 percent since the start of the year.

The dollar traded at $1.4706 per euro at 7:51 a.m. in Tokyo from $1.4709 yesterday in New York where it reached $1.4737, the weakest level since Sept. 25, 2008. A lower dollar increases the appeal of commodities as an alternative investment.

“There are just too many leading indicators pointing to a stable to higher oil price,” Sander said. “There are not a lot of reasons to bet against oil at this point.”

Fuel Supplies

U.S. crude oil stockpiles fell to 332.8 million barrels, the Energy Department said. Supplies of distillate fuel climbed 2.24 million barrels to 167.8 million, the highest since January 1983. Gasoline inventories rose 547,000 barrels to 207.7 million last week, the department said.

Imports decreased 2.1 percent to an average 8.9 million barrels a day. Refineries operated at 86.9 percent of capacity in the week ended Sept. 11, down 0.3 percentage point from the previous week, according to the department.

Japan’s and Australia’s stock futures rose amid speculation the global economy has returned to growth. Futures on Japan’s Nikkei 225 Stock Average expiring in September closed at 10,310 in Chicago yesterday, 1 percent higher than 10,210 in Osaka. Australia’s S&P/ASX 200 Index futures contract due in September rose 1.1 percent in Sydney today.

The Standard & Poor’s 500 Index gained 1.5 percent in New York yesterday and the Dow Jones Industrial Average added 108.3 points, or 1.1 percent.

Brent crude oil for November settlement on the London-based ICE Futures Europe exchange rose $1.81, or 2.6 percent, to $71.67 a barrel yesterday.