WASHINGTON -- Oil and gasoline futures prices shot up Wednesday after the government reported a decline in supplies, surprising energy traders.
The price of crude for May delivery rose $1.53 to $35.60 per barrel in midday trading on the New York Mercantile Exchange, where May gasoline futures moved 5 cents higher to $1.124 per gallon.
"This is the time of year when we're supposed to be building crude inventories" at a rate of about 2 million barrels per week, said Ed Silliere, vice president of risk management at Energy Merchant in New York.
Instead the Energy Department reported that commercially available oil supplies fell by 2.1 million barrels to 292.2 million barrels for the week ended April 2, leaving nationwide inventories 20.9 million barrels below the 5-year average for this time of year. Still, supplies are about 4 percent above year-ago levels.
Gasoline supplies fell by 800,000 barrels, putting them 5.5 million barrels below the 5-year average and even with last year, according to the federal agency.
At the retail level, the average price of gasoline nationwide is $1.77, according to AAA - a record in nominal terms, although not when adjusted for inflation.
Energy prices have been high all year due to a combination of factors: tight supplies, strong demand, a weak dollar and market fears about limited U.S. refining capacity and political instability in several oil-producing nations.
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