NEW YORK (MarketWatch) -- Crude-oil futures surpassed the $71-a-barrel level Wednesday after government data showed a surprising decline in last week's inventories, as imports fell and gasoline demand picked up.
Crude inventories fell by 4.4 million barrels in the week ended June 5, the Energy Information Administration reported. Analysts surveyed by energy information provider Platts had expected an increase of 800,000 barrels.
After the data, July crude rose 1.9% to $71.32 a barrel on the New York Mercantile Exchange. It was up less than 1.5% before the data were released.
Crude imports fell 676,000 barrels a day from the previous week, while gasoline demand increased slightly from a week ago, the EIA report showed.
Over the past four weeks, gasoline demand has averaged 9.2 million barrels a day, up 0.4% from the same period last year.
The EIA also said crude inventories at Cushing, Okla., the delivery point for Nymex futures, fell 900,000 barrels to 29 million. Meanwhile, gasoline inventories fell 1.6 million barrels, and distillate stockpiles declined 300,000 barrels.
Refineries operated at 85.9% of their operable capacity last week, slightly lower than a week ago.
"This is a clearly bullish report," said James Williams, an economist at energy research firm WTRG Economics. "The decline in crude, gasoline and distillate stocks should add to the current feeding frenzy in petroleum speculation."
Late Tuesday after crude's floor trading closed, the American Petroleum Institute reported crude inventories fell 5.96 million barrels to 357.9 million last week.
The Washington-based API, an industry trade group, uses different criteria for measuring changes in inventories.
"With a draw across the board and in Cushing we could see the price of crude to have an upward posture, but we feel it has already been priced in," said Tariq Zahir, managing member of futures trading firm Tyche Capital Advisors.
Also on the Nymex, July reformulated gasoline rose 3.02 cents, or 1.6%, to $1.9975 a gallon, and July heating oil added 2.28 cents, or 1.3%, to $1.8305 a gallon.
July natural-gas futures fell slightly to $3.724 per million British thermal units.
China economy
Also boosting oil prices Wednesday were fresh signs of economic strength in China.
Two Chinese newspapers reported that industrial production data for May, due to be officially released Friday, rose by 8.9% from a year ago. On Tuesday, new data showed Chinese car sales rose 34% last month.
In currency trading Wednesday, the dollar cut its earlier losses.
In other energy news, the world's proven oil reserves stood at 1.258 trillion barrels at the end of 2008, excluding Canadian oil sands, down 0.2% from 1.261 trillion barrels in 2007, according to BP's (BP 52.24, +0.28, +0.54%) statistical review of world energy released Wednesday.
Over the year, global oil consumption fell by 0.6%, or 420,000 barrels a day -- the first decline since 1993 and the largest drop in 27 years.
