Price of oil up on reports of lower U.S. supplies

| Thursday, December 16, 2004

Crude oil traded around $44 a barrel Thursday, Dec. 16, a day after the price per barrel bolted 5 percent higher.

The price shift came after U.S. government data showed a slight decline in crude and heating oil supplies as colder weather in the Northeast drove up fuel demand.

With the official start of winter less than a week away, traders focused on the tight supply of heating oil and sent light, sweet crude for January delivery $2.37 higher to $44.19 per barrel Wednesday on the New York Mercantile Exchange. Heating oil prices surged 8.39 cents to $1.3884 per gallon.

“The weather’s getting colder and inventories are still low,” Tom Bentz, a broker at BNP Paribas Commodity Futures in New York, where the temperature has dipped into the 30s this week, told The Associated Press. “So, you’re getting a recovery” in oil prices, which are about $11 cheaper per barrel than the record of $55.17 set in October.

Inventories of crude oil in the United States are 6 percent above year-ago levels, even though the Energy Department reported Wednesday that supplies fell by 100,000 barrels last week to 293.8 million barrels.

However, the nation’s supply of distillate fuel, which includes heating oil, diesel and jet fuel, is 12 percent below year-ago levels, unchanged from a week ago at 119.3 million barrels.

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