Market News

Crude prices surge on inventory decline and supply concerns

Crude prices continued to surge on Wednesday, rallying on the news that U.S. inventories fell more than expected and Chevron confirmed a fire at its Nigerian oil facility.

Light, sweet crude for July delivery jumped 1.32 dollars, or 1.9 percent, to settle at 71.33 dollars a barrel on the New York Mercantile Exchange, the highest close in seven months. The price went as high as 71.79 dollars a barrel during the session, the highest since Oct. 21.

According to the U.S. Energy Department’s Energy Information Administration (EIA), crude stockpiles dropped by 4.4 million barrels for the week ended June 5 while gasoline inventories dropped by 1.6 million barrels. However, the market had broadly expected a drop of 4 million barrels in crude and a slight build in gasoline.

Meanwhile, U.S. oil company Chevron confirmed a fire at its Utonana production facility in southern Nigeria on Wednesday, spurring more concerns on supply side.

In London, Brent crude for July delivery rose 1.11 dollars to 70.73 dollars a barrel on the ICE Futures exchange.



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