Crude prices jump after surprise EIA report

30 September 2010

Written by Kim Bardsley

Crude oil prices rallied sharply in late trading on the New York Mercantile Exchange yesterday (September 29th) and have retained gains this morning.

The commodity was virtually unchanged at $77.86 a barrel this morning, close to a seven-week high achieved yesterday.

Upward momentum was witnessed after the Energy Information Administration (EIA) released its latest weekly demand report, which showed a strong decline in gasoline and distillate inventories last week.

Analysts were expecting to see further weakness in the EIA report but after strong figures, the market pushed fuel futures higher across the board, with heating oil recording particularly strong gains above $2.19 a gallon, up 6.6 cents.

"The draws in crude stocks, as well as the products, is seen as a particularly good sign because we're moving into the season where refineries close for maintenance," said Ben Westmore, a minerals and energy economist at National Australia Bank in Melbourne, speaking to Bloomberg.

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