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Page added on May 28, 2009

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Oil soars on OPEC, U.S. inventory drop

NEW YORK (Reuters) – Oil surged past $65 a barrel on Thursday to a fresh six-month high after OPEC decided to keep output unchanged and government data showed a steep drop in U.S. crude inventories.

U.S. crude oil for July delivery settled up $1.63 to $65.08 a barrel, the highest settlement since November 5, after hitting an intraday high of $65.44. London Brent crude rose $1.89 to settle at $64.39 a barrel.

U.S. crude stocks fell by 5.4 million barrels in the week to May 22, the U.S. Energy Administration said, above analyst expectations for a 700,000-barrel decline, as refiners ramped up output ahead of the summer.

Analysts said while the data showed gasoline demand still trailing year-ago levels, it was looking stronger during the seven days leading into the May 23-25 Memorial Day holiday weekend, which traditionally kicks off summer holiday travel.

“What we are seeing here is the demand side start to improve,” said analyst Phil Flynn at Alaron Trading in Chicago.

Reuters



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