Crude oil futures extended gains after a U.S. government report showed a bigger-than-forecast drop in supplies of gasoline and distillate fuels. Gasoline inventories fell 4.17 million barrels to 225 million in the week ended March 11, the Energy Department said today in a weekly report. Stockpiles were forecast to decrease by 1.5 million barrels, according to the median of 16 analyst estimates in a Bloomberg News survey. Distillate supplies, which include heating oil and diesel, slipped 2.6 million barrels to 152.6 million. Stockpiles were forecast to decline by 1.4 million barrels. Inventories of crude oil rose 1.75 million barrels to 350.6 million, the department said. Supplies were forecast to climb by 1.3 million barrels. Crude oil for April delivery rose $2.19, or 2.3 percent, to $99.37 a barrel at 10:35 a.m. on the New York Mercantile Exchange. Oil traded at $99.12 a barrel before the release of the report at 10:30 a.m. in Washington. Oil also rose as escalating violence in Bahrain bolstered concern that turmoil will spill into neighboring Saudi Arabia, the world’s biggest crude-exporting country. Prices climbed as much as 2.1 percent after security forces cleared protesters from a square in Bahrain’s capital and state television said two policemen were killed. In Libya, troops loyal to leader Muammar Qaddafi advanced toward Benghazi, the nation’s second-largest city. “There’s still a great deal of trouble in the Middle East,” said Addison Armstrong, director of market research at Tradition Energy, a Stamford, Connecticut-based broker. “The situation in Libya is very fluid and there is shooting in the streets of Bahrain, which has got the attention of the bulls.” Tear Gas Bahrain security forces used tear gas to drive protesters from their rallying point at the central Pearl Roundabout in the capital Manama. The mostly Shiite Muslim demonstrators fled into nearby backstreets as military vehicles and helicopters were deployed in the area. The stock market suspended trading. A state of emergency was declared yesterday as a second contingent of troops from Gulf nations poured into the kingdom. Bahrain is connected to Saudi Arabia by a 25-mile causeway. Libya’s state-run television ran an appeal to the people of Benghazi, the center of the rebellion in the east of the country, urging them to join Qaddafi’s troops. The army “is coming to secure you and to lift the injustice and horror off you and to protect your pure souls and precious blood,” said the broadcast, which has been airing since yesterday. Pro-Qaddafi forces attacked Ajdabiya, a city 100 miles (160 kilometers) from the rebel capital, using airstrikes and artillery late yesterday, although rebels remained in control, Ahmed Omar, a military spokesman for the opposition, said today by telephone. To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net. To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.

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