Oil prices rise to $76 a barrel on drop in US crude stocks

SINGAPORE: Oil prices gained Friday after US government data showed a larger-than-expected decline in domestic crude stocks.

Light, sweet crude for October delivery rose 25 cents to $76.55 a barrel in Asian electronic trading on the New York Mercantile Exchange, midmorning in Singapore. The contract added 57 cents to settle at $76.30 a barrel Thursday.

In its weekly inventory report, the US Energy Department's Energy Information Administration said crude oil inventories fell by 3.9 million barrels in the week ended Aug 31, more than tripling analysts' average prediction for a 1.1 million barrel decline.

Gasoline inventories fell by 1.5 million barrels, slightly more than the 1.1 million barrel decline analysts surveyed by Dow Jones Newswires had expected.

Refinery utilization, however, jumped by 1.8 percentage points to 92.1 per cent of capacity, much more than the 0.2 percentage point increase analysts had expected.

The EIA report also showed that distillates, which include heating oil and diesel fuel, grew by 2.3 million barrels, much larger than the expected 100,000 barrel gain.

Energy futures on Thursday also rose after Syrian armed forces said they opened fire on Israeli fighters that allegedly violated Syrian airspace, analysts said.

Oil traders worry that any conflict in the Middle East will escalate, drawing the US in and disrupting oil supplies.

Prices were also supported by news that the US embassy in Nigeria warned that American and other Western interests in the country are at risk of a terrorist attack.

Nigeria is a key supplier of crude oil, and worries about supply disruptions there often send oil futures higher.

October Brent crude rose 3 cents to $74.80 a barrel on the ICE futures exchange in London.

Nymex heating oil futures rose 0.32 cent to $2.14 a gallon (3.8 liters) while gasoline prices gained 0.55 cent to $1.9772 a gallon. Natural gas futures dropped 4.8 cents to $5.602 per 1,000 cubic feet.