Oil futures shot to their highest price in almost two weeks Wednesday, after a closely watched report said gasoline demand rose to its highest level in more than five months.
The weekly report from the Energy Information Administration also showed oil stockpiles last week rose less than expected, while gasoline inventories fell sharply.
Light, sweet crude for June delivery settled up $2.25, or 2.5%, to $91.43 a barrel on the New York Mercantile Exchange, its highest finish since April 11. Brent crude on the ICE futures exchange rose $1.42, or 1.4%, to $101.73 a barrel, its highest settle since April 12.
The EIA said gasoline demand rose 4.4% to 8.75 million barrels a day last week, the highest level since November. Demand was 3% above the year-earlier level, marking the first year-over-year increase in demand since March 8.
"We're in positive territory" year over year, said Gareth Lewis-Davies, analyst at BNP Paribas. "This is not typical of what we've seen."
Traders found a number of other bullish cues in the EIA report. Oil inventories last week rose 900,000 barrels, less than the increase of 1.2 million barrels forecast in a Dow Jones Newswires survey of analysts. Gasoline stockpiles tumbled 3.9 million barrels last week, the EIA reported, while stockpiles of distillates, including heating oil and diesel, rose 100,000 barrels. Refinery utilization fell 2.8 percentage points to 83.5% of capacity.
Analysts had expected gasoline stocks to fall 400,000 barrels, while distillate stocks were projected to rise 300,000 barrels. Refiners were expected to boost operations by 0.3 percentage point.
The reading on gasoline demand was significant because demand for the fuel has been slack in recent years, as high unemployment has kept drivers off the road and efficiency of new cars and trucks continues to rise.
Analysts expect gasoline demand to continue rising in the coming months as the summer driving season kicks in. That should trigger an increased need of crude oil from refiners. European refiners are also expected to exit a period of prolonged maintenance in the coming weeks that could contribute to demand.
U.S. oil inventories remain close to their highest level in 23 years, helped in large part by booming production.
After Wednesday's move, Nymex crude-oil futures are off just 0.4% for the year to date. Brent, the global benchmark, is down 8.4% over the same period.
Front-month May reformulated gasoline blendstock, or RBOB, settled 2.84 cents, or 1%, higher at $2.7474 a gallon. May heating oil settled 2.96 cents, or 1.1%, higher at $2.8413 a gallon.
Copyright (c) 2012 Dow Jones & Company, Inc.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.