Inventory Down, Crude Up: Oil Alert

Oil prices remain higher following an Energy Department report showing a bigger-than-expected drop in crude stocks.

Author:: David Moss
Publish date:: Sep 10, 2009 12:33 PM EDT

NEW YORK (

) -- A mix of data and news, including the Energy Department's weekly inventory figures, has oil investors guesstimating energy demand and sending futures higher.

According to the report, crude inventories plummeted by a more-than-forecast 5.9 million barrels to 337.5 million for the week ending September 4th. On Wednesday, the industry's American Petroleum Institute said that crude supplies dropped by 7.2 million barrels.

Analysts surveyed by Platts had expected oil inventories to fall by a much more slender 1.8 million barrels.

The federal report also said gasoline inventories grew by 2.1 million barrels last week, well off the 1.5 million barrel decline many expected.

In addition, federal data showed that distillate fuels jumped by 2 million barrels, while propane and propylene stocks grew by 1.6 million barrels.

After the release, the front-month contract for light, sweet crude was adding 24 cents at $71.55 on the New York Mercantile Exchange.

Before the report, crude prices were moving higher following a slew of signals. Earlier, the Organization of Petroleum Exporting Countries said it

would maintain current production outputs

The International Energy Agency also bettered its future oil demand estimates, saying that demand consumption would likely tick higher to 84.4 million barrels a day in 2009 and 85.7 million in 2010.

Still, demand in 2009 is expected to be off by 2.2% compared to 2008, though that's better than the 2.7% decline previously forecast.

Around the oil sector this morning, shares of

Exxon Mobil

(XOM) - Get Report

were moving higher by 25 cents, or 0.4%, to $70.75.

Chevron

(CVX) - Get Report

and

ConocoPhillips

(COP) - Get Report

were also adding in the session, gaining 1.6% and 0.3%, each.

Likewise, American depositary shares for