Oil gains as crude supplies plummet
Drop of 4.3 million barrels is far more than expected, could convince OPEC to hold off on production cut.
NEW YORK (CNNMoney.com) -- Oil prices rose Wednesday after the government said supplies of crude oil fell far more than expected.
U.S. light crude for January delivery rose 68 cents to $61.70 a barrel on the New York Mercantile Exchange. Oil traded up 3 cents just prior to the report's release.
In its weekly inventory report, the Energy Information Administration said crude stocks slid by 4.3 million barrels last week. Analysts were looking for a drop of 600,000 barrels, according to Reuters.
Distillates, used to make heating oil and diesel fuel, fell by 500,000 barrels, while gasoline supplies slipped by 100,000 barrels. Analysts were looking for a 100,000-barrel decline in distillates supplies and a 1.2 million drop in gasoline stockpiles.
Oil prices have fallen more than 25 percent from highs reached in July and have been range-bound near $60 for the past several weeks.
Stocks of oil majors, including BP (Charts), ExxonMobil (Charts), ConocoPhillips (Charts), Chevron (Charts) and Royal Dutch Shell (Charts), stopped mirroring falling crude prices in mid-September and rebounded as traders bet on rising oil prices and looked for deals in a sector many saw as undervalued.
But over recent weeks the traditional relationship, with oil stock prices tracking the cost of crude, has been re-established.
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