Oil climbs after inventory report
Crude prices rise above $66 on geopolitical fears despite surprise jump in crude, gasoline stocks.
NEW YORK (CNNMoney.com) - Oil prices rose Thursday, surpassing $66 a barrel, on supply fears in producer countries despite a government report showing crude inventories surprisingly increased.
U.S. light sweet crude for February delivery rose 97 cents to $66.70 a barrel. Just before the Energy Information Administration released its report, the contract was down eight cents at $65.65, and was then about 40 cents lower when it began to rebound.
"I think markets are really focusing on what's happening with Iran and the issues in Nigeria that could potentially disrupt supply and that is building a fairly healthy premium," Brian Hicks, the co-fund manager of U.S Global Investors' Global Resources Fund, told CNNMoney.com.
On Wednesday, crude prices hit their highest trading price since Sept. 30, reaching $66.93.
Crude oil inventories, which were released a day later than usual due to Monday's Martin Luther King Jr. holiday, climbed by 2.7 million barrels in the week ended Jan. 13, versus forecasts for a decline of 400,000 barrels, according to Reuters. At 321.4 million barrels, U.S. crude oil inventories remain well above the upper end of the average range for this time of year.
Crude oil imports have risen over the past four weeks, according to the EIA report, averaging 10 million barrels per day, an increase of 31,000 barrels per day over the same period last year.
Crude prices have trended higher recently on supply fears in producer countries Iran and Nigeria.
Nigerian militants, who have shuttered 220,000 barrels per day, or 10 percent of the country's output, according to Reuters, have threatened attacks on all oil companies operating within the country's borders.
Iran, the world's fourth largest oil producer, potentially faces the scrutiny of the U.N. Security Council on suspicions by the West that the Middle Eastern country is attempting to build an atomic bomb.
The country's economy minister recently warned of higher crude prices worldwide if sanctions were imposed over its nuclear program.
An alleged audiotape message allegedly from al Qaeda leader Osama bin Laden warned of terror attacks within the U.S., adding to existing geopolitical fears.
An OPEC delegate, however, said Thursday that it would work to cover any supply disruptions, particularly from Nigeria, making it seem less likely that the cartel will decide to cut output when it meets in Vienna, Austria, at the end of this month.
Total motor gasoline inventories rose by 2.8 million barrels last week, putting them in the upper half of the average range. Gasoline inventories were expected to increase by 1.9 million barrels, according to a Reuters survey.
Distillate fuel inventories increased by 900,000 barrels last week, and are just above the upper end of the average range for this time of year. The news service reported that distillates were expected to climb by 2.3 million barrels last week.
--from staff and wire reports
Goldman Sachs says oil is bound for $70 a barrel -- Click here.
Missed out on the rest of the day's headlines? Click here.