Oil, Gas Futures Up On Inventory Report

NEW YORK (AP) _ Oil and gas futures jumped after the government reported a surprising drop in refinery activity and big declines in both oil and gasoline inventories last week. <br/><br/>Light, sweet crude

Wednesday, August 8th 2007, 10:04 am

By: News On 6

NEW YORK (AP) _ Oil and gas futures jumped after the government reported a surprising drop in refinery activity and big declines in both oil and gasoline inventories last week.

Light, sweet crude for September delivery rose 55 cents to $72.97 a barrel on the New York Mercantile Exchange, while September gasoline jumped 2.6 cents to $2.9702 a gallon.

September Brent crude rose 8 cents to $71.88 a barrel on the ICE Futures exchange in London.

Heating oil futures rose 1.97 cents to $1.9838 a gallon, while natural gas futures rose 7.5 cents to $6.276 per 1,000 cubic feet.

At the pump, meanwhile, gas prices fell a cent overnight to a national average of $2.821 a gallon, according to AAA and the Oil Price Information Service. Retail prices, which typically lag the futures market, peaked at $3.227 a gallon in late May.

Gas futures and retail prices have fallen steadily in recent weeks as refineries have boosted their output of gasoline.

In its weekly inventory report, the Energy Department's Energy Information Administration said refinery utilization fell by 2.3 percentage points in the week ended Aug. 3 to 91.3 percent. Analysts surveyed by Dow Jones Newswires, on average, had expected an increase of 0.1 percentage point.

Despite the decline in refinery activity, oil inventories fell by 4.1 million barrels, much more than the 2 million barrel decline analysts had expected. Gasoline inventories fell by 1.7 million barrels, when analysts had expected a 1 million barrel increase.

Distillates, which include heating oil and diesel fuel, rose by 1 million barrels. Analysts had expected a 1.8 million barrel gain.

Crude imports fell by 167,000 barrels a day to an average of 10 million barrels last week, while imports of gasoline grew by 172,000 barrels to an average of 1.4 million barrels a day.

Demand for gasoline averaged 9.7 million barrels a day, 0.8 percent higher than last year, the EIA said.