Oil prices jump on surprise draw down of US supply

Oil prices spike as government reports largest draw in oil supplies since August 2008

NEW YORK (AP) -- Oil prices spiked Wednesday after the government reported a huge draw of crude oil from U.S. stockpiles.

The report was surprising because the demand for energy has been knocked down so badly by the recession. Crude withdrawn from storage facilities last week wiped out a buildup in supplies over the past two weeks.

Benchmark crude for September delivery jumped $3.23 to settle at $72.42 a barrel on the New York Mercantile Exchange. That contract expires Thursday, and most of the trading has already shifted to the October contract, which climbed $2.74 to settle at $73.83.

If the October contract ends the week at that price, it would set a new high for 2009.

The Energy Information Administration said crude in storage fell by 8.4 million barrels last week. Gasoline held in storage fell as well.

Investors have been looking for signs that the country would recover its energy appetite as the economy healed. The EIA report, on the surface, would suggest that may have begun. Last week's drop in crude supplies was the most since Aug. 15, 2008, a month after crude prices peaked above $147 a barrel.

Yet it may be too soon to say that consumers and businesses are using more energy. For one, crude imports over the past four weeks are down 9.5 percent compared with the same period last year.

"They didn't import more because, at the end of the day, we just don't need it," analyst Stephen Schork said.

Many analysts say there is no evidence that consumers are driving and flying more, or that big industrial power users are ramping up operations.

The amount of jet fuel, gasoline, diesel and crude in storage is still huge, said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.

Yahoo Finance Report - Link

Originally posted by Scooby Doo
Oil prices spike as government reports largest draw in oil supplies since August 2008

"They didn't import more because, at the end of the day, we just don't need it," analyst Stephen Schork said.

Yahoo Finance Report - Link

Can't let consumers have a break even if they arent using as much fuel.

Got to keep those big oil profits shored up.

Double post.
Second nonexisting line.

[edit on 093131p://f19Wednesday by badgerprints]

Thank God oil prices arent as high as they were last summer! Imagine all the recently unemployed trying to cope with high heating and gasoline prices.

Originally posted by Scooby Doo
Oil prices spike as government reports largest draw in oil supplies since August 2008

NEW YORK (AP) --
Crude withdrawn from storage facilities last week wiped out a buildup in supplies over the past two weeks.

The amount of jet fuel, gasoline, diesel and crude in storage is still huge, said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.

Yahoo Finance Report - Link

So a buildup was wiped out, but the amount in storage is huge, so therefore prices must go up? Can someone tell me why this isn't funny logic?

reply to post by Jim Scott


you did mean fuzzy logic right

TPTB only want you to feel all warm and fuzzy as they take care of us.

Looks like the TPTB are getting ready to use the stockpile for something else, like a an up incoming war with another country.



[edit on 8/20/2009 by Big Oil]