Oil up on US supply draws

20:02, Jun 29 2011

Oil jumped 3 percent on Wednesday as sharp drawdowns in US crude and gasoline stocks fed a rally that also saw prices surge when Greece passed an austerity plan to avoid a sovereign debt default.

US crude inventories fell last week for a fourth week, government data showed, dropping 4.4 million barrels, much more than forecast, to 359.5 million barrels. Gasoline stockpiles declined 1.4 milion barrels to 213.2 million barrels, against the forecast for a small increase.

"The oil market has been wrong-footed by the crude withdrawal, which is at least twice as big as people had expected," said Addison Armstrong, market research senior director at Tradition Energy in Stamford, Connecticut.

"The stats are too big to ignore, so I would not be surprised if prices rise again in the coming days," he added.

By 12:15pm EDT (4:15am NZT), ICE Brent crude for August delivery rose US$3.09 to US$111.87 a barrel. US August crude gained US$2.51 to US$95.40.

Greek Prime Minister George Papandreou won a parliamentary majority in favor of a five-year austerity program, clearing a major hurdle in Greece's bid to win access to international funding to avoid default.

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Reuters