NEW YORK (MarketWatch) - Crude-oil futures edged up Wednesday, trading above $71 a barrel after government data showed a drop in U.S. crude inventories as imports fell. In its weekly update, the Energy Information Administration reported a drop of 1 million barrels in crude inventories in the week ended Oct. 2, as imports fell by 4.5%. Analysts had expected a modest increase. The EIA report, however, also showed a bigger-than-expected buildup in gasoline inventories last week, as demand largely remained unchanged while gasoline production and imports rose from a week ago. On the New York Mercantile Exchange, rude for November delivery rose 27 cents, or 0.4%, to $71.25 a barrel. Trading remained volatile, with the contract also falling as low as $70.34. "EIA numbers reported a drop in inventories which was due to lower imports," said Tariq Zahir, managing member of Tyche Capital Advisors. "The crude market fundamentals are still bearish." "We do feel crude will trade on the fundamentals rather than the dollar weakness we have been seeing over the last couple for days," he added. Motor gasoline inventories rose by 2.9 million barrels, last week. Analysts had expected an increase of 1.3 million barrels, according to a Platts survey. Distillate inventories, which include diesel and heating oil, rose by 700,000 barrels, the EIA said. The EIA report showed that gasoline supplied, an implied gauge for consumption, rose 1.5% to 9.27 million barrels a day. Total petroleum demand stood at 18.73 million barrels a day, down 0.9% from a week ago. Refineries increased their production of petroleum products last week, putting 14.6 million barrels a day of crude oil into use, up slightly from a week ago. That put the refinery utilization rate at 85%. Gasoline production rose 3.5% to 9.42 million barrels a day. Gasoline imports also rose, up 19% to 1 million barrels a day. Imports of crude oil, meanwhile, fell to 9.10 million barrels a day. Crude inventories at Cushing, Okla., the delivery point for Nymex crude futures, fell 5.3% to 25.1 million barrels, the EIA reported. Late Tuesday, the Washington-based American Petroleum Institute reported that crude inventories fell by 254,000 barrels and distillates declined by 2.9 million barrels last week. Motor gasoline stockpiles, meanwhile, rose by 544,000 barrels. The API and the EIA use different methodologies to calculate petroleum stockpiles. In other energy trading Wednesday, November reformulated gasoline fell 1.77 cents, or 1%, to $1.755 a gallon. November heating oil gained slightly to $1.8198 a gallon. November natural-gas futures rose 13.5 cents, or 2.8%, to $5.017 per million British thermal units. The United States Oil Fund (USO 35.88, -0.66, -1.81%) added 0.3%, and the United States Natural Gas Fund (UNG 11.99, +0.18, +1.51%) gained 2.9%. Consumption forecasts The EIA on Tuesday announced an upward revision in its expectations for world oil consumption. The revision amounts to an increase of 200,000 barrels a day for the remainder of 2009 and for 2010, in large part because of improved expectations for Asian growth. "Sustained economic growth in China and signs of a turnaround in other Asian countries continue to fuel expectations of a global recovery in world oil consumption," the EIA said in its short-term energy outlook. The agency didn't revise its projections for oil prices, however, because ample supplies remain on the market. Even after the upward revisions, world oil demand for 2009 and 2010 is projected to be below last year's level of 85.46 million barrels a day. For 2009, daily demand is pegged at 83.67 million barrels, rising to an estimated 84.77 million barrels for 2010. Elsewhere in the commodity markets, gold futures soared to a record just below $1,050 an ounce on Wednesday.

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