Oil rebounds after inventories drawdown

22 October 2009

Headline crude oil prices climbed dramatically in late trading on the New York Mercantile Exchange (Nymex) yesterday (October 21st) after data from the Energy Information Administration (EIA) revealed an unexpected spike in demand for fuel last week.

The EIA figures showed an unexpected drawdown on both gasoline and distillates inventories, with gasoline stockpiles falling by a particularly pronounced margin of 5.2 million barrels over the course of the week.

Meanwhile, distillate inventories - which include heating oil - declined by 1.1 million barrels, suggesting that demand for the fuel is picking up in the world's biggest energy consumer nation.

Reacting to the announcement from the EIA, traders engaged in a late-stage buying frenzy on the Nymex, pushing the headline December-delivery contract up as high as $81.62 (£49) a barrel.

The contract closed for the day at $81.37 a barrel, up $2.25 from the previous day.

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