| GEO Business|
| Oil prices jump on surprise drawdown of US stocks|
| Updated at: 0551 PST, Sunday, August 30, 2009|
NEW YORK: Oil prices spiked Wednesday after the government reported a huge draw of crude oil from U.S. stockpiles.
The report was surprising because the demand for energy has been knocked down so badly by the recession. Crude withdrawn from storage facilities last week wiped out a buildup in supplies over the past two weeks.
Benchmark crude for September delivery jumped $3.23 to settle at$72.42 a barrel on the New York Mercantile Exchange. That contract expires Thursday, and most of the trading has already shifted to the October contract, which climbed $2.74 to settle at $73.83.
If the October contract ends the week at that price, it would seta new high for 2009. The Energy Information Administration said crude in storage fell by 8.4 million barrels last week. Gasoline held in storage fell as well.
Investors have been looking for signs that the country would recover its energy appetite as the economy healed. The EIA report, on the surface, would suggest that may have begun.
Last week's drop in crude supplies was the most since Aug. 15, 2008, a month after crude prices peaked above $147 a barrel.
Yet it may be too soon to say that consumers and businesses are using more energy. For one, crude imports over the past four weeks are down 9.5 percent compared with the same period last year.
“They didn't import more because, at the end of the day, we just don’t need it,'' analyst Stephen Schork said.