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Decline in Gasoline Inventories Caused Oil Prices to Rise

October 15, 2009 at 22:17 by Vladimir Vyun

Crude oil advanced to more than $77 per barrel to the highest in a year in New York after a report that U.S. gasoline stockpiles fell as refineries idled units for maintenance. Refineries operations dropped to 80.9 percent of capacity, the lowest since April. As the result, inventories of the motor fuel slumped to 5.23 million barrels last week and gasoline output slid 10 percent.

Refiners usually idle units for repairs and upgrades in October, when demand for gasoline is lower, and before heating-oil use increases. Yet 4.1 percentage point drop in refinery utilization rates last week was the biggest since September 2008. The report was definitely bullish for the oil products.

Another reason for the oil prices increase is global economic recovery. As example of the recovery can be considered the fact that the increase for the cost of living in the U.S. was slower in September.

November delivery for crude oil futures advanced $1.73 (2.3 percent) to $76.91 per barrel by 13:05 on NYMEX. November settlement for Brent crude oil gained $1.04 (1.4 percent) to $74.14 per barrel on ICE Futures Europe exchange.

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