Crude oil climbed as an Energy Department report showed an unexpected drop in U.S. inventories as refineries bolstered operating rates and imports declined. Oil advanced as much as 3 percent after the department said supplies fell 15,000 barrels to 370.3 million last week. Inventories were forecast to rise 1.7 million barrels, according to analysts surveyed by Bloomberg News. Refineries operated at 83.2 percent of capacity, the most since the week ended April 1. “The DOE report was definitely a bullish force for the market,” said Sean Brodrick, a natural resource analyst with Weiss Research in Jupiter, Florida. Crude oil for June delivery increased $2.46, or 2.5 percent, to $99.37 a barrel at 10:59 a.m. on the New York Mercantile Exchange. Futures are up 43 percent from a year ago. Oil traded at $98.76 a barrel before the release of the inventory report at 10:30 a.m. in Washington. Brent crude oil for July settlement increased $1.85, or 1.7 percent, to $111.84 a barrel on the London-based ICE Futures Europe exchange. Imports of crude oil dropped 4.4 percent to 8.57 million barrels a day, the report showed. Fuel imports declined 14 percent to 2.26 million barrels a day, the lowest level since the week ended March 11. Supplies of crude oil at Cushing, Oklahoma, the delivery point for the New York-traded West Texas Intermediate grade, fell 1.59 million barrels to 40 million. Gasoline inventories rose 119,000 to 205.9 million in the week ended May 13. Supplies were forecast to increase 950,000 barrels, according to the median of 16 analyst responses in the Bloomberg News survey. Stockpiles of distillate fuel, a category that includes heating oil and diesel, declined 1.16 million barrels to 143.1 million, the lowest level since April 2009. Gasoline Consumption U.S. gasoline demand rose 2.5 percent to 9.05 million a day last week, the first gain in three weeks, the report showed. Gasoline for June delivery increased 1.99 cents, or 0.7 percent, to $2.9392 a gallon in New York. Oil also climbed as China’s supply of diesel may tighten in the third quarter as the nation’s largest refineries shut about 7 percent of their capacity for scheduled maintenance, according to Oilchem.net. Chinese refineries will reduce their combined capacity in July, the peak month for maintenance, by at least 36 million metric tons a year, equivalent to 720,000 barrels a day, said Oilchem, a Shandong-based website, citing a survey. PetroChina Co.’s Dushanzi and Lanzhou refineries will halt capacity by about 420,000 barrels a day, and China Petroleum & Chemical Corp. (386)’s Qingdao and Jiujiang refineries will cut 300,000 barrels a day, according to the report. Commodity Rally Crude oil will lead a rally in commodities as production fails to keep pace with consumption, said Ray Eyles, chief executive officer of JPMorgan Chase & Co.’s commodity business in Asia. The Organization of Petroleum Exporting Countries and other producers won’t increase output fast enough to meet demand, the bank said in a report May 6. “Ultimately, the long-term fundamental supply and demand of commodities is still pointing to higher prices,” Eyles said in an interview in Singapore. “The commodities that have the best underlying fundamental stories at the moment” are in energy because of unrest in the Middle East and Japan’s nuclear crisis, he said. 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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