Drop in US Crude Supplies Pushes Oil Prices above $88 a Barrel

October 19 00:00 2011

New York, October 19 (RainbowNewsLine.com) – As US crude supplies fell unexpectedly last week suggesting demand could be improving, oil prices rose above $88 a barrel Wednesday in Asia. In electronic trading on the New York Mercantile Exchange, benchmark crude for November delivery went down 22 cents at $88.12 a barrel at late afternoon Singapore time. The contract went up $1.96 to settle at $88.34 in New York on Tuesday.

On the ICE Futures Exchange in London, Brent crude for December delivery was up 40 cents at $111.55 a barrel. Crude inventories dropped 3.1 million barrels last week as reported by the American Petroleum Institute late Tuesday whereas analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted an increase of 1.8 million barrels. API said that inventories of gasoline fell 1.6 million barrels last week while distillates fell 2.2 million barrels.

Some analysts believe that commodities like oil will drop next year amid weak global economic growth and a stronger U.S. dollar which will make crude more expensive for investors with other currencies. Capital Economics said in a report that “We would still expect fresh falls in 2012 as global economic activity remains sluggish, risk appetite stays fragile and the dollar recovers more ground.”

In other NYMEX trading, heating oil fell 1.1 cents to $3.02 per gallon and gasoline futures dropped 1.3 cents to $2.70 per gallon. Natural gas added 0.2 cent to $3.56 per 1,000 cubic feet.