BUSINESS

Oil rises above $96 as US supplies rise less than expected, dollar weakens

05/08/2013 01:46 EDT | Updated 07/08/2013 05:12 EDT
Oil climbed to its highest price in more than a month on Wednesday, after the government reported U.S. crude supplies increased less than analysts expected.

In New York, benchmark crude for June delivery rose US$1 to finish at $96.62 a barrel. It hasn't settled that high since April 2.

The U.S. Energy Department said oil supplies grew last week by 200,000 barrels to 395.5 million barrels, which is 4.2 per cent above year-ago levels. Analysts were expecting an increase of 1.9 million barrels in the week ended May 3.

Lower imports of crude and busier refineries explain the smaller-than-expected increase. Refineries operated at 87 per cent of capacity last week, up 2.6 percentage points from the week before. Still, demand for gasoline fell 2.4 per cent over the past four weeks, and demand for distillates, such as heating oil and diesel, also fell.

Oil also got a boost as the U.S. dollar weakened against the euro. Oil is traded in U.S. dollars, so it becomes more attractive to investors with foreign currency as the dollar retreats.

Brent crude, which is the benchmark for international oil varieties, was down 6 cents to end at $104.34 per barrel on the ICE Futures exchange in London.

In other energy futures trading on the New York Mercantile Exchange:

— Wholesale gasoline rose two cents to finish at $2.85 a gallon.

— Heating oil fell one cent to end at $2.91 a gallon.

— Natural gas added 6 cents to finish at $3.98 per 1,000 cubic feet.

___

Pablo Gorondi in Budapest and Pamela Sampson in Bangkok contributed to this report.

(TSX:ECA, TSX:IMO, TSX:SU, TSX:HSE, NYSE:BP, NYSE:COP, NYSE:XOM, NYSE:CVX, TSX:CNQ, TSX:TLM, TSX:COS.UN, TSX:CVE)