NEW YORK—The price of oil finished higher yesterday after the Energy Department’s Energy Information Administration reported a much bigger drop in the nation’s crude supplies than analysts expected. After trading lower much of the day, benchmark crude for February delivery closed up 17 cents at US$93.09 a barrel on the New York Mercantile Exchange.
The EIA report said crude supplies fell by 11.1 million barrels, or 3 per cent, last week. Analysts expected a drop of just a million barrels. Oil supplies shrank as crude imports fell off by almost a million barrels a day last week. At the same time, supplies at the crucial hub for domestic crude at Cushing, Okla., stayed up at near-record levels. Overall U.S. crude inventories are about 9 percent above year-ago levels.
There were also some encouraging economic reports Friday that raised hopes for higher oil demand. The Labor Department reported US employers added 155,000 jobs in December, a steady gain that shows hiring held up during tense negotiations to resolve the fiscal cliff issue. The solid job growth wasn’t enough to push down the unemployment rate, however, which remained at 7.8 per cent last month.
Also, the Institute for Supply Management said US service firms’ activity expanded in December by the most in nearly a year, driven by a jump in new orders and hiring. The index measures growth in industries that cover 90 per cent of the workforce, including retail, construction, health care and financial services.
