Commodity Corner: Oil Rises on Sharp Inventory Decline

January crude oil posted a 34-cent gain Wednesday after the U.S. Department of Energy reported a higher-than-expected decline in oil stocks.

Oil settled at $88.62 a barrel after trading within a range from $86.83 to $89.09. The Energy Department's Energy Information Administration (EIA) reported that inventories fell by 2.8 percent to 346 million barrels last week. The 9.9 million-barrel week-on-week decline was more than three times greater than what analysts had expected. It resulted from higher refinery utilization rates and lower imports.

The EIA also reported that gasoline inventories rose 0.4 percent last week to 214.8 million barrels. Although the level represented a seven-week high, front-month gasoline gained a penny Wednesday to settle at $2.31 a gallon.

January gasoline peaked at $2.32 and bottomed out at $2.26.

Natural gas for January delivery fell 3.5 cents to end the day at $4.22 per thousand cubic feet. It traded from $4.19 to $4.28.