Oil rose for a second day in New York on speculation demand for fuel may be growing in the U.S. after a government report showed gasoline inventories plunged the most in 12 years.
Crude advanced as much as 0.5 percent after the Energy Department said yesterday that gasoline stockpiles declined by 7 million barrels last week to 209.7 million, the biggest drop since Oct. 9, 1998. Inventories were forecast to fall 1 million barrels, according to a Bloomberg News survey. Futures pared gains as European equity markets opened lower.
“The talk is that this U.S. inventory report saw a spectacular draw in gasoline, and that prompted the buying,” said Victor Shum, a senior principal at consultants Purvin & Gertz Inc. in Singapore. “The bounce is mainly a rebound from the sharp correction of a couple of days ago.”
Crude for May delivery rose as much as 49 cents to $107.60 a barrel and was at $107.14 in electronic trading on the New York Mercantile Exchange at 8:44 a.m. London time. Yesterday, the contract climbed 86 cents to $107.11, the highest settlement since April 11. Prices are up 25 percent from a year ago.
Brent oil for May settlement traded at $122.90 a barrel, up 2 cents, on the ICE Futures Europe exchange in London. The contract, which expires today, rose $1.96, or 1.6 percent, to $122.88 yesterday. The more actively traded June contract was unchanged at $122.33 after rising 1.6 percent yesterday.