Oil rebounds after US inventory drop

London: Oil bounced back after US data yesterday unexpectedly showed a big drop in crude inventories.

US crude briefly rose more than $2 after the data and was trading 66 cents higher at $131.69 a barrel by 1508 GMT. London Brent crude rose 77 cents to $131.70.

The US government data showed a fall of 8.8 million barrels in crude oil stocks, the biggest weekly decline since September 2004. Analysts forecast the stock level to be unchanged.

Gasoline stocks also fell by more than expected.

Better off

However, stocks at Cushing, the delivery point of US crude traded on the New York Mercantile Exchange (Nymex), increased 700,000 barrels and distillate stocks showed a larger-than-expected build.

"Today's report is nothing but bullish once again," said Rob Kurzatkowski, an analyst with Optionxpress. "One thing that could drag on the report is the build at Cushing, so at least the Nymex delivery point is amply supplied."

Earlier yesterday, prices fell to below $129 because of growing signs that consumer countries could be having trouble coping with surging energy prices. Washington's Energy Information Administration said on Wednesday US oil demand in March fell to the lowest level for that month in five years.

Metals: Gold down

Platinum fell more than four per cent to a three-week low under $2,000 an ounce yesterday as gold edged lower on a firmer dollar and weaker oil, which lessened the yellow metal's appeal as an anti-inflation tool.

Spot gold was quoted at $892.10/$893.10 an ounce at 1016 GMT, down from $899.65/$901.05 in New York late Wednesday.

Platinum hit a three-week low of $1,974.