Oil Hits $65/bbl On OPEC, U.S. Inventory Drop

[Purveyor]

Source: Reuters / Forexyard

* U.S. data shows surprise 5.4 million barrel stocks fall
* OPEC decides to keep output unchanged, as expected
* OPEC Secretary General says market oversupplied

NEW YORK, May 28 (Reuters) - Oil jumped more than 2 percent to top $65 a barrel on Thursday 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 traded up $1.55 to $65 a barrel by 1:16 p.m. EDT (1716) GMT after having touched $65.18. London Brent crude rose $1.76 to $64.26 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.

"Gasoline demand over the Memorial Day weekend is a critical point in judging the health of the U.S. economy. I don't think the increased demand over the holiday was a fluke."

Read more: http://www.forexyard.com/reuters/popup_reuters.php?action=2009-05-28T172201Z_01_SYD113600_RTRIDST_0_MARKETS-OIL-UPDATE-7

[CatholicEdHead]

1. I doubt it

If you restrict supply, then you can raise prices. There is a glut of oil on tankers and storage facilities. You can control the price through reducing gasoline production to keep those 'healthy' profit margins.

[imdjh]

2. I can't wait for Exxon to claim the increase is to fund alternative energy.

[Bankhead_ATL]

3. I am soo upset with OPEC right now

[David__77]

4. Prices at $100/barrel seem reasonable.

When you adjust for inflation, they are certainly not very high.

[dvdaves75]

5. be happy

It sure is a good thing that we got rid of the Texas oilman that was keeping oil high, torturing people, and keeping us in 2 unpopular wars!!!

[DCKit]

6. I'll take $65 over $145 any day.

Enjoy your stay.

[frylock]

8. i guess that's the difference between getting effed in the ass.

or skullfucked. meanwhile, gas has climbed past $2.50 in my neighborhood. i would hope that our democratic overlords would maybe look into that.

[madrchsod]

7. refineries are running at 85%......

what does s-p-e-c-u-l-a-t-i-o-n spell?