MW: Oil futures gain 1% as API reports big drop in supplies
By Polya Lesova, MarketWatch
FRANKFURT (MarketWatch) -- Oil futures gained on Wednesday after the American Petroleum Institute reported an unexpectedly sharp decline in U.S. crude inventories.
Crude oil for December delivery rose 76 cents, or 1%, to $79.90 a barrel in electronic trading on Globex.
Earlier, the contract hit an intraday high of $80.03 a barrel. The December oil contract will expire at the end of trading on Friday.
"API figures for oil and product inventories were more bullish than initially forecast," wrote analysts at Vienna-based JBC Energy GmbH in a note to clients.
Crude supplies dropped by 4.37 million barrels during the week ended Nov. 13, the API said late Tuesday. Analysts polled by Platts expected a rise of 1.2 million barrels.
Motor gasoline stocks declined by 963,000 barrels, while distillate stocks rose by 507,000 barrels, according to the API.
Analysts polled by Platts projected an increase of 950,000 barrels in gasoline inventories and a decline of 700,000 barrels in distillate supplies.
The Energy Information Administration will report its more closely watched inventories data at 10:30 a.m. Eastern.
"Surprises cannot be ruled out either, given that during the past week, oil production in and shipments from the Gulf of Mexico were interrupted for several days due to hurricane Ida," wrote analysts at Commerzbank.
Retail gasoline demand last week rose 2.1% in the U.S. from a year ago, according to media reports citing the MasterCard SpendingPulse report.
"Market bulls may view this as an indication that demand recovery has started," the Commerzbank analysts said. "However, the increase is largely the result of a base effect, as gasoline demand faced a sharp decline last year."
Elsewhere in the commodity markets, gold futures climbed to a record on Wednesday, as the dollar fell against other major currencies, polishing the investment appeal of the precious metal. Read more about gold's surge.
The dollar index (DXY 74.97, -0.40, -0.53%) , which tracks the performance of the greenback against a basket of other major currencies, fell 0.4% to 75.041.
Gold and oil are both denominated in U.S. dollars, so a weaker dollar makes the commodities less expensive for investors holding other currencies.
