Thursday, May 27, 2010

Oil Rises to Near $70, But Gas Prices Drop

Oil prices rose to near $70 a barrel Wednesday in Asia as a drop in U.S. gasoline supplies and rebounding Asian stock markets bolstered confidence that demand for fuel is rising.

According to the Associated Press, benchmark crude for July delivery was up $1.13 to $69.88 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract dropped $1.46 to settle at $68.75 on Tuesday.

Gasoline supplies unexpectedly fell last week, dropping by 3.2 million barrels, the American Petroleum Institute said late Tuesday. Analysts had expected an increase of 150,000 barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Crude supplies at the key Cushing, Oklahoma storage terminal fell 772,000 barrels while overall inventories of crude and distillates rose, the API said.

The Energy Department's Energy Information Administration is scheduled to announce its supply report later Wednesday.

Most major Asian stock markets bounced back Wednesday from losses this week, boosting the optimism of oil traders who often look to equities as a barometer of overall investor confidence.

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