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Oil Prices Rise Above $61 a Barrel
Friday February 23, 8:38 am ET
By George Jahn, Associated Press Writer

Oil Prices Rise Above $61 a Barrel, Extending Earlier Gains on U.S. Inventory Data


VIENNA, Austria (AP) -- Oil prices rose Friday, extending gains registered the previous day after a U.S. snapshot of energy inventories revealed a surprising drop in U.S. gasoline and heating oil supplies.
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Tension between Western powers and Iran also boosted energy prices. The U.N. nuclear watchdog reported Thursday that Iran -- OPEC's No. 2 supplier -- is still refusing to end uranium enrichment, in defiance of the Security Council.

Light, sweet crude for April delivery on the New York Mercantile Exchange rose 22 cents to $61.17 in electronic trading by afternoon in Europe. The contract price jumped 88 cents a barrel on Thursday, continuing a rally that analysts said has largely been driven by demand for petroleum products.

Brent crude for April rose 42 cents to $61.04 a barrel by midday Friday on London's ICE Futures Exchange.

U.S. crude inventories climbed 3.7 million barrels to 327.6 million barrels in the week ending Feb. 16, the Energy Information Administration said Thursday. But what stoked the market's advance were gasoline inventories falling by 3.1 million barrels to 222.1 million barrels, and distillates, which include heating oil and diesel, dropping by 5 million barrels to 128.3 million barrels.

Analysts were expecting, on average, a modest rise in crude oil and gasoline inventories and a smaller drop in distillates.

"Cold temperatures and refinery maintenance in the U.S. are seen to be responsible for the considerable stock draw," said Vienna's PVM Oil Associates. The high demand has been sparked by chilly weather and snowstorms in the Northeast and Midwest regions of the United States. Distillate fuel demand was nearly 10 percent higher over the past four weeks than it was over the same period last year, the EIA said.

Supplies remain relatively ample -- U.S. crude, gasoline and heating oil stockpiles are at or above the average range for this time of year, the EIA said.

Natural gas futures fell nearly 12 cents to $7.609 per 1,000 cubic feet on the Nymex and heating oil rose more than a penny to $1.7395 a gallon.

Tetsu Emori, the chief commodities strategist with Mitsui Bussan Futures in Tokyo, said it was likely oil prices would remain within a tight range of $57 to $62 a barrel in the coming days.

Associated Press writer Tanalee Smith in Singapore contributed to this report.
http://biz.yahoo.com/ap/070223/oil_prices.html?.v=7