Crude Oil Climbs to Two-Year High on U.S. Supply Decline, Economic Growth [View All]

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Source: Bloomberg

By Mark Shenk

Dec. 22 (Bloomberg) -- Crude oil rose to the highest level in more than two years after government reports showed that U.S. supplies dropped and the country’s economy grew more than previously estimated in the third quarter.

Stockpiles fell 5.33 million barrels to 340.7 million, the lowest level since February, the Energy Department said. A 3.4 million-barrel decline was forecast, according to the median of 14 responses in a Bloomberg News survey. The Commerce Department said gross domestic product expanded 2.6 percent in the third quarter, up from a previous estimate of 2.5 percent.

“Today’s crude numbers were very bullish,” said Andre Julian, chief financial officer and senior market strategist at OpVest Wealth Management in Irvine, California. “The GDP numbers point to extended growth in the U.S. Previously, we were seeing economic and demand growth in China and emerging markets, now it’s spreading here.”

Crude oil for February delivery rose 67 cents, or 0.8 percent, to $90.49 a barrel at 11:06 a.m. on the New York Mercantile Exchange. Futures touched $90.80, the highest level since Oct. 8, 2008. Prices have climbed 14 percent this year.

Oil in New York traded at $90.60 before the release of the report at 10:30 a.m. in Washington.

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