Crude oil futures leaped more than $3 Wednesday after government data showed U.S. gasoline stockpiles dropping for the third straight week. Light, sweet crude for May delivery settled at $104.83 a barrel, up $3.85, or 3.8 percent, on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled $3.58 higher at $103.75 a barrel. The Energy Information Administration reported that while U.S. crude stockpiles rose by 7.3 million barrels last week _ far more than the 2.3 million barrels analysts anticipated _ gasoline stockpiles shrank by 4.5 million barrels, more than twice the drop expected. Stockpiles of distillate fell by 1.6 million barrels, close to expectations. The market initially wavered after the morning report, weighing crude's increase against the gasoline statistic. «There was a little bit of a tug of war over what's more important, the draw in gasoline or the build in crude,» Tim Evans, an energy analyst at Citigroup in New York, told Dow Jones Newswires. «It looks like gasoline has won the battle.» Gasoline demand was also 214,000 barrels a day stronger last week, at 9.33 million barrels a day, the EIA reported. The figure ran counter to concerns a U.S. recession will cut demand. May gasoline futures settled up 13.44 cents, or 5.1 percent, to $2.7736 a gallon. The huge one-day jump follows months in which gasoline has traded at a substantial discount to heating oil futures amid strong U.S. demand for heating oil and global demand for distillate fuels. May heating oil settled up 7.13 cents, or 2.5 percent, at $2.9510 a gallon. Crude finished the session higher for the first time since Thursday. Each day this week it has slid to about $100 a barrel, failing to make a clean break below the psychologically significant level. Traders said its rebound Wednesday reflects speculative buying into oil's price strength. «We tested levels below $100, and there was a lot of buying just beneath,» said Mike Fitzpatrick, an analyst at brokerage MF Global in New York. Wednesday's intraday low on the Nymex was $99.84 a barrel. Oil rallied despite signs of a world economic slowdown. The International Monetary Fund cut its forecast for U.S. economic growth in 2008 to 0.5 percent from 1.5 percent, and its forecast for world economic growth to 3.7 percent from 4.1 percent, citing the «largest financial crisis in the U.S. since the Great Depression,» according to a document viewed by Dow Jones Newswires. In Congressional testimony Wednesday, Federal Reserve Chairman Ben Bernanke raised the prospect of a U.S. recession in the first half of the year. In prepared remarks, he said futures markets indicate a «leveling out of prices for oil and other commodities,» which will moderate inflation. «The 'R' word _ recession _ is being echoed all over the place,» said George Gero, vice president of global futures at RBC Capital Markets in New York. «That doesn't seem to help keep crude down because crude is not being used only domestically,» but in large emerging economies with fast-growing demand, he said.
