How Will Drilling Help If Refineries Are Cutting Back?
Oil Rises $2.99 on Bigger-Than-Expected Gasoline Supply Decline
By Mark Shenk
Aug. 13 (Bloomberg) — Crude oil futures rose more than $2 a barrel after a U.S. Energy Department report showed a bigger- than-forecast decline in inventories of gasoline as refiners shut units and imports fell.
Gasoline supplies dropped 6.39 million barrels to 202.8 million barrels last week, the biggest decline since October 2002 when Hurricane Lili and Tropical Storm Isidore disrupted output along the Gulf of Mexico. Stockpiles were forecast to decrease 2.15 million barrels, according to a Bloomberg News survey.
“Refiners are cutting runs and imports plunged because demand is so weak,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “Refiners weren’t making money so it made sense to shut units.”