Oil prices rise in Asia

Oil futures rose Thursday in Asia, extending a price increase that came after figures showed large and unexpected declines in U.S. crude and gasoline inventories last week.

Photo: Oil prices rise in Asia

Light, sweet crude for December delivery rose 85 cents to US$87.95 a barrel in electronic trading on the New York Mercantile Exchange by midmorning in Singapore. The contract jumped $1.83 to $87.10 a barrel in the Nymex floor session after the fuel report.

Crude supplies fell last week 5.3 million barrels, the U.S. Energy Department's Energy Information Administration said. Analysts surveyed by Dow Jones Newswires, on average, had been expecting supplies to increase 300,000 barrels.

"We haven't missed like this in a long time," said James Cordier, president of Liberty Treading Group in Tampa, Florida.

Analysts said the decline was particularly surprising because refineries are shutting down for seasonal maintenance and processing less crude. Refinery activity fell during the week ended Oct. 19 by 0.2 percentage point to 87.1 percent of capacity. Analysts had expected an increase of 0.3 percentage point.

Much of the decline in crude supplies was due to a sharp drop in imports, analysts said. Daily imports of crude oil fell last week 1.3 million barrels to an average of 9.1 million barrels a day, the EIA said.

Supplies of gasoline and heating oil also fell last week. Gasoline inventories dropped by 2 million barrels, countering analyst expectations for an increase of 1.1 million barrels.

Gasoline imports also fell last week, and average daily demand for gasoline rose 120,000 barrels, the EIA said, further supporting prices.

Supplies of distillates, which include heating oil and diesel, fell 1.8 barrels last week. Analysts had expected distillate inventories to rise 200,000 barrels.

December Brent crude rose 54 cents to US$84.91 a barrel on the ICE futures exchange in London.

Nymex heating oil futures rose 1.05 cents to US$2.3525 a gallon (3.8 liters) while gasoline prices added 1.55 cents to US$2.1630 a gallon. November natural gas futures gained 5.7 cents to US$7.029 per 1,000 cubic feet.