COLUMBUS, OHIO - Oil prices jumped Thursday as new government data showed that oil inventories fell unexpectedly and that consumption of gasoline and other petroleum products -- which have been plummeting because of the recession -- may be starting to edge higher.
Light, sweet crude for April delivery rose 7 percent, or $2.77, to settle at $40.18 per barrel on the New York Mercantile Exchange. The vast majority of trades have shifted to the April contract with the March contract expiring Friday.
Benchmark crude for March delivery surged 14 percent, or $4.86, to settle at $39.48.
The Energy Information Administration said crude stocks decreased 200,000 barrels to 350.6 million barrels for the week ended Friday. Analysts had expected stocks to grow by 3.5 million barrels, according to Platts, the energy information arm of McGraw-Hill Companies. Inventories have risen more than 30 million barrels in the prior six weeks.
Even with the decline, crude supplies remain ample and U.S. oil storage sites, including the main depot in Cushing, Okla., are brimming with crude. Storage levels are nearing those last seen in summer 1990, when Iraq invaded Kuwait.
A stunning drop-off in driving by Americans has led to growing levels of gasoline in storage.
Total gasoline inventories rose 1.1 million barrels last week, or 0.5 percent, to 218.7 million barrels compared with analyst projections of a decline of 1 million barrels.
After declining for most of the past year as the worst recession in at least a generation takes hold, the report's four-week moving average showed that gasoline consumption rose 0.8 percent. Declining demand has been a key factor in the drop in oil prices after a peak of $147 in July.
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