Oil rises as stockpiles fall

20 December 2007

The downward trend in crude oil prices was reversed on Wednesday after it was revealed stocks of the commodity have fallen dramatically in the US.

Prices had fallen for four consecutive days, as concerns about the state of the US economy prompted fears of a downturn in demand for oil products.

However, a report by the Energy Information Administration brought an abrupt halt to the price falls.

It revealed the stockpile of crude in the US fell by 7.6 million barrels last week, meaning it is now 32.2 million barrels below the level of 12 months ago.

The report also revealed stocks of propane and distillate, which includes heating oil, had fallen significantly.

As a result, the price of US crude for February delivery on the New York exchanges rose by $1.16 to close at $91.24 (£45.75) a barrel, while Brent crude climbed $1.36 to settle at $91.48 in London trading.