US oil rises as crude stocks fall unexpectedly NEW YORK (October 20) : US oil prices rose on Wednesday after fresh inventory data showed stocks unexpectedly fell last week, re-igniting fears of a winter fuel supply shortages.

Crude for November delivery on the New York Mercantile Exchange (Nymex) finished the day at $33.48 a barrel, advancing 49 cents on the day. The day's gains were trimmed from a session peak of $33.80. Providing the main catalyst for the day's advance was a key American Petroleum Institute's (API) report late on Tuesday which showed that US crude stocks fell 3.1 million barrels last week, the second consecutive large stock draw. The sharp draw cut down national crude stocks to 280.7 million barrels, less than two million barrels above 24-year lows struck in early August, underlining worries over the nation's lack of options if supplies were disrupted this winter.

Heating oil futures also rallied amid fresh concerns over supply availability in the face of stock drawdowns last week. But the rally faltered after the API issued another report providing proof that consumers were stocking up to avoid higher prices or potential shortages this winter. Heating oil deliveries jumped by a huge 18.5 percent in September from a year ago to 1.172 million barrels per day, API said. .........."Much of the increased demand for heating oil likely was due to wholesalers and retail customers stocking up for the winter," API said. ..........Crude's rally shifted the market's focus once again to supply concerns, after losing steam following last week's rise to $37 just 80 cents away from a fresh Gulf War high struck in September amid escalating violence between Palestinians and Israelis. ..........From Friday to Tuesday, prices eased as a US-brokered summit reached an agreement that calls for the Israelis and Palestinians to put an end to three weeks of strife. Despite the day's gains, market participants see bias turning to the downside in the coming days.

"The market was rallying (back to the day's high) but near the close, it petered out, because of concerns that there would be more oil coming into the system in the next few weeks," said John Kilduff, senior vice president, energy risk management at Fimat USA Futures in New York.-Reuters

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-- Martin Thompson (mthom1927@aol.com), October 20, 2000