Oil Rises to 7-Week High on Forecast of Gasoline Supply Decline

Simmons: Crude oil today is “preposterously cheap”

Crude oil rose to a seven-week high on speculation that a government report will show U.S. gasoline inventories fell for a fourth straight week.

U.S. stockpiles of gasoline and distillate fuel, a category that includes heating oil and diesel, probably dropped last week, according to a Bloomberg News survey. Tomorrow’s Energy Department report is expected to show that refineries are performing maintenance before the peak-demand summer months. Oil also rose on signs of economic growth in the U.S. and Europe.

“This is when you price in the inventory expectations,” said Aaron Kildow, a broker at Prudential Financial Derivatives LLC in New York. “Gasoline should be strong because we expect that supplies fell last week. There’s a direct relationship between supply and price.”

Crude oil for May delivery rose $1.64, or 2.6 percent, to $65.80 a barrel at 12:18 p.m. on the New York Mercantile Exchange. Prices touched $65.90, the highest since Feb. 6. Futures are up 22 percent from a year ago.

Bloomberg