Oil gains on Bhutto attack, inventory drop

Crude nears $97 a barrel after former Pakistan prime minister is assassinated and crude supplies fall again in the U.S.

NEW YORK (CNNMoney.com) — Oil prices rose Thursday after the assassination of former Pakistan Prime Minister Benazir Bhutto and a larger-than-expected decline in U.S. crude inventories.

U.S. crude for February delivery rose 93 cents to $96.90 a barrel, after being up to $96.37 just before the government report.


Bhutto, who had a controversial past in Pakistan and returned in October to again seek the prime minister’s seat, was killed along with at least 14 others in a suicide attack following a political rally Thursday.

Although nuclear-armed Pakistan has little oil, traders fear any instability could spread to neighboring states. Pakistan boarders Iran, the world’s fourth largest exporter of crude, and also lies near the oil rich Central Asian states.

Oil prices were also supported by a U.S. government report Thursday showing a drop in domestic supplies of crude oil and heating fuel.

In its weekly inventory report, delayed by a day due to the Christmas holiday, the Energy Information Administration said crude stocks fell by 3.3 million barrels last week. Analysts were looking for a drop of 1.3 million barrels, according to a Dow Jones poll.

CNN