US oil prices rise on tightening supply at key hub

US oil prices rise on tightening supply at key hub

Oil prices in New York jumped Wednesday after data showed a fall in crude supplies at a key US trading hub and a surprisingly large decline in gasoline stocks.

US benchmark West Texas Intermediate for May delivery rose $1.07 to $100.26 a barrel on the New York Mercantile Exchange.

European benchmark Brent oil for May delivery added four cents to $107.03 a barrel on the Intercontinental Exchange in London.

Overall US oil supplies rose 6.6 million barrels for the week, according to the weekly report from the US Energy Information Administration, well above the 2.8 million projected by analysts surveyed by the Wall Street Journal.

But the EIA report showed a decline of 1.3 million barrels at the Cushing, Oklahoma oil-trading hub for the US benchmark.

Wednesday’s EIA report marked the eighth straight week to see a decline at Cushing, said Robert Yawger, who directs the futures division at Mizuho Securities. Stocks at Cushing are at their lowest level since January 2012, he said.

“The concentration is on the Cushing number,” Yawger said.

The drop in supply at Cushing is a “continually bullish factor” for oil, said Andy Lebow, senior vice president for energy derivatives at Jefferies Bache.

“We’ll have enough supply… but we’re getting to fairly significantly low levels,” Lebow said.

Analysts also cited a 5.1 million barrel drop in gasoline supplies, much more than the 1.3 million decline forecast by analysts.

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