Oil price over $77 in late trading, inventories lower

Crude oil prices soared to a yearly high above $77 per barrel Thursday late trading as the Energy Department reported an unexpected drop in gasoline supplies and a smaller than predicted jump in crude stockpiles.

Light sweet crude for crude oil rallied to $77.58 per barrel, up $2.40 on the session. Prices earlier reached as high as $77.97.

The Energy Information Administration reported crude oil inventories increased by 400,000 barrels in the week ended October 9, compared to the build of 2.2 million barrels projected by analysts.

Motor gasoline inventories decreased by 5.2 million barrels last week. Supplies were expected to rise 1.6 million barrels.

Late Wednesday afternoon, the American Petroleum Institute reported that crude supplies declined 172,000 last week. Gasoline inventories fell 2.66 million barrels.

“Utilization fell a great deal and the gasoline production number really grabs you by the neck,” said Peter Beutel, president of trading adviser Cameron Hanover Inc. in New Canaan, Connecticut. “This will obviously eat into stocks. If refinery utilization stays at this level and demand doesn’t drop, we will see 4- and 5-million-barrel draws for weeks to come.”

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