Oil prices jumped above $70 a barrel today after the government reported a huge draw of crude oil from U.S. stockpiles.
Benchmark crude for September delivery added $1.78 to $70.97 a barrel on the New York Mercantile Exchange. The contract ends Thursday.
Prices jumped immediately after the Energy Information Administration said crude in storage fell by 8.4 million barrels last week. Gasoline held in storage fell as well, but the draw down in crude was the big surprise.
Investors have been looking for signs that the country would recover its energy appetite as the economy recovered. The Energy Information Administration’s report that crude inventories dropped by 8.4 million barrels last week showed that this may be happening.
Oil prices sunk earlier in the day, after stock markets in Asia and Europe slumped on worries about consumer spending. Shanghai’s index tumbled as much as 5 percent, pulling down other markets in Britain, Germany and France.
Meanwhile, Hurricane Bill grew to a Category 4 storm, but forecasters said it would steer clear of petroleum refiners in the Gulf Coast.
U.S. benchmark crude supplies have a huge impact on energy prices around the world. The price of crude dropped earlier this year as U.S. supplies grew to their highest level in nearly two decades.
The Organization of Petroleum Exporting Countries has tried to cut into global crude supplies, but it appears support for that strategy has faded. (AP)
