Oil prices gain after inventories

Prices climb after report shows drop in crude inventory and a jump in gasoline stocks.

September 14, 2005: 11:10 AM EDT

NEW YORK (CNN/Money) - Oil prices topped $64 a barrel Wednesday after a government report said crude oil inventories fell by more than expected and gasoline inventories surprisingly surged.

The price for U.S. light sweet crude for October delivery was up $1.09 to $64.20 a barrel at 10:48 a.m. ET, 14 minutes after the Energy Information Administration report. The contract, which stood at $63.85 just before the report, climbed as high as $64.25 after the report, then fell as low as $63.05 before bounding back up.

In the previous session, crude prices fell 23 cents to settle at $63.34 a barrel on the New York Mercantile Exchange. Prices are nearly $7 below record highs hit two weeks ago.

Investors were closely watching the inventory data for a sense of the future direction of energy commodities. A little over two weeks ago Hurricane Katrina slammed into the Gulf Coast, disruption oil and gasoline production and prompting the Federal government to tap emergency oil reserves.

Crude oil inventories dropped by 6.6 million barrels for the week ended Sept. 9, versus forecasts for a 2 million barrel drop according to Briefing.com. At 308.4 million barrels, the inventory was above the upper end of the average range for this time of year.

Total motor gasoline inventories rose by 1.9 million barrels last week, the EIA reported, putting them above the upper end of the average range for this time of year. Analysts polled by Briefing.com estimated a drop of 2.2 million barrels in inventory.

The government agency reported that gasoline production rose substantially for the week, averaging nearly 8.5 million barrels per day.

Distillate fuel inventories fell by 4.1 million barrels last week, and are in the upper half of the average range for this time of year. The consensus among analysts polled by Briefing.com anticipated a fall of 150,000 barrels.