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Crude oil futures gained in Asian trading Thursday following the release of a U.S. government weekly report which showed a larger-than-expected drop in distillate stocks.

Crude oil futures gained in Asian trading Thursday following the release of a U.S. government weekly report which showed a larger-than-expected drop in distillate stocks.

Light, sweet crude for February delivery on the New York Mercantile Exchange rose 37 cents to $ 58.93 a barrel in midmorning electronic trading. The contract settled Wednesday at $ 58.56 a barrel, up 47 cents.

Heating oil advanced 0.61 cent to $ 1.7625 a gallon, while gasoline rose 1.56 cents to $ 1.5520 a gallon. Natural gas fell 1.1 cents to $ 14.260 per 1,000 cubic feet.

U.S. supplies of distillate fuels, which include heating oil and diesel oil, fell by 2.8 million barrels last week, while stocks of crude rose by a surprise 1.3 million barrels to 322.5 million barrels, the Energy Information Administration said Wednesday.

Gasoline inventories declined by 300,000 barrels to 204.1 million barrels, the agency said.

The report sparked mixed reactions from traders in the previous session, with prices initially dipping in response to the build in crude stocks before turning around and advancing on the drawdown in gasoline and distillate stocks, which came amid a decline in production and record oil demand.

The data showed strong demand for heating oil, as lower-than-normal temperatures in the U.S. Northeast, the world’s largest market for that kind of fuel, led to an increased use of the distillate in recent weeks.

Oil prices also were lifted by uncertainty about whether Royal Dutch Shell PLC will declare a force majeure on its light, sweet crude exports from Nigeria after attackers set off dynamite at a pipeline Tuesday. Nigeria is Africa’s largest oil exporter.

‘We have to look at the extent of the damage and if it’s significant enough to affect the quantity that can be exported, then we will consider the options,’ Shell spokesman Donald Boham said Wednesday.

Unrest in key producers Nigeria, Saudi Arabia and Iraq was partly blamed for the price rise in 2004 when analysts had said any disruption to supply could affect the world’s already thin buffer of spare crude.

Source : www.forbes.com

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