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Oil Advanced After U.S. Inventories Unexpectedly Fell

November 4, 2009 at 23:05 by Vladimir Vyun

Crude oil gained after the U.S. inventories unexpectedly fell because of declining imports. Stockpiles of crude oil dropped last week to 335.9 million barrels from 3.94 million. Another reason for oil advance is rising equities and a declining U.S. dollar boosting the demand for commodities as an inflation hedge.

President of Strategic Energy & Economic Research said that “inventories are down because nobody wants to have excess supply on hand. The drop is not due to a tightening market.” President of Prestige Economics LLC thinks that “this is completely an import story.”

Supplies could fall even more if it weren’t for the decline in refinery runs. Refineries operated at 80.6 percent of capacity, compared to 1.2 percentage points in the previous week, the lowest rate since the week ended April 10th.

December delivery for crude oil gained $0.71 (0.9 percent) to $80.31 per barrel by 11:49 on the New York Mercantile Exchange.

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