Oil prices climb as US reports drop in heating stocks

2nd November 2011, Comments 0 comments

Oil prices rose on Wednesday as traders reacted to a larger-than-expected drop in US distillate stockpiles, indicating strong demand for heating fuel in the world's biggest economy ahead of winter.

New York's main contract, light sweet crude for delivery in December, rose 91 cents to $93.10 a barrel.

Brent North Sea crude for December delivery gained $1.12 to $110.66 in late London deals.

The US Department of Energy said that distillate stockpiles, which include heating fuel, slumped 3.6 million barrels last week. Analysts polled by Dow Jones Newswires had forecast a fall of 1.5 million barrels.

"Distillates stocks decreased ... as demand remained surprisingly resilient," said Credit Agricole CIB analyst Christophe Barret.

Prices fell on Tuesday after Greece's shock call for a referendum on the latest EU bailout plan revived fears of a Greek default that could sap the global economy and, in turn, demand for oil.

German Chancellor Angela Merkel and French President Nicolas Sarkozy summoned Greek Prime Minister George Papandreou for talks on Wednesday after his referendum plan raised the spectre of Greece's exit from the euro.

© 2011 AFP

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