Crude oil and gasoline rose after a U.S. government report showed an unexpected decline in stockpiles of the motor fuel. Gasoline supplies fell 121,000 barrels to 219.9 million barrels last week, the Energy Department said today. Inventories were forecast to climb 2 million barrels, according to the median estimate in a Bloomberg News survey. Fuels also rose as stocks gained on President Barack Obama’s plans to bolster the economy. “The unexpected drawdown in gasoline supplies is giving everything a boost, along with the strength we’re seeing in the stock market,” said Phil Flynn, senior trader at Alaron Trading Corp. in Chicago. “A stock market rally raises optimism about demand in the months ahead.” Crude oil for March delivery rose 58 cents, or 1.4 percent, to settle at $42.16 a barrel at 2:44 p.m. on the New York Mercantile Exchange. Prices are down 5.5 percent this year and are 54 percent lower than a year ago. The U.S. House of Representatives is set to approve Obama’s proposed $816 billion economic stimulus package today. The plan is aimed at pulling the economy out of a recession through tax cuts and $604 billion in spending. The Dow Jones Industrial Average increased 200.72 points, or 2.5 percent, to 8,375.45. The Standard & Poor’s 500 Index rose 28.38 points, or 3.4 percent, to 874.09. Crude oil inventories rose 6.22 million barrels to 338.9 million barrels in the week ended Jan. 23, the department said. Supplies were forecast to climb 2.9 million barrels, according to the median of 14 analyst estimates. Cushing, Oklahoma Supplies at Cushing, Oklahoma, where oil traded on Nymex is stored, climbed 0.9 percent to 33.5 million barrels last week, the highest since at least April 2004, when the department began keeping records for the location. Volume in electronic trading on the exchange was 445,872 contracts as of 3:07 p.m. in New York. Volume totaled 592,328 contracts yesterday, up 21 percent from the average over the past three months. Open interest yesterday was 1.25 million contracts. The exchange has a one-business-day delay in reporting open interest and full volume data. Stockpiles of distillate fuel, a category that includes heating oil and diesel, fell 1 million barrels to 144 million barrels, the amount that was forecast by the analysts. Refineries operated at 82.5 percent of capacity last week, down from 83.3 percent, the Energy Department said. Analysts forecast that refiners would operate at 82.8 percent of capacity. Companies often shut units for maintenance in January and February as attention shifts away from heating oil and before gasoline use rises. ConocoPhillips ConocoPhillips, the second-largest U.S. refiner, expects refinery operating rates near 80 percent during the first quarter due to planned turnarounds and hydro-skimming economics. The profit margin, or crack spread, for making three barrels of crude into two of gasoline and one of heating oil, based on futures prices, climbed 22 percent to $11.4198 a barrel today. “We are planning for a prolonged and difficult business environment,” ConocoPhillips Chief Executive Officer Jim Mulva said during a conference call today. “2009 and 2010 will be very challenging for our global economy and the energy business.” Gasoline futures for February delivery rose 7.5 cents, or 6.8 percent, to $1.1835 a gallon in New York, the highest settlement since Jan. 6. It was the biggest one-day increase since Dec. 31. Heating oil for February increased 4.7 cents, or 3.4 percent, to end the session at $1.4215 a gallon. Regular gasoline at the pump, averaged nationwide, rose 0.2 cent to $1.842 a gallon, AAA, the largest U.S. motorist organization, said on its Web site today. Prices have declined 55 percent from the record $4.114 a gallon reached on July 17. ‘Persistent Downtrend’ “The products are showing strength because we are looking at a persistent downtrend in refinery runs,” said John Kilduff, senior vice president of energy at MF Global Inc. in New York. “The ConocoPhillips announcement should drain stockpiles and support the crack.” BP Plc, Europe’s second-largest oil company, may shut four U.S. refineries that can process 1.3 million barrels a day of crude oil if United Steelworkers union members target the refineries for a strike. Exxon Mobil Corp., the world’s largest oil company, said its refineries will operate if there’s a work stoppage. The union and U.S. refining companies are negotiating their labor contract, which expires Jan. 31. “Products are outpacing crude because we have a number of refinery turnarounds, and the contract is expiring between the United Steelworkers and a number of refineries and that could impact production,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. Brent crude oil for March settlement increased $1.17, or 2.7 percent, to settle at $44.90 a barrel on London’s ICE Futures Europe exchange.

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