NEW YORK -- Oil prices surged yesterday on fears of hurricane damage and lower-than-expected crude oil and gasoline inventory data released by the government.
"The market is obviously concerned about the storm," said Tom Kloza, director of the Oil Price Information Service, adding that the crude stock statistics helped trigger the rally.
On the New York Mercantile Exchange, crude futures rose $1.84 to settle at $44.61 a barrel.
Ed Silliere, vice president of risk management at Energy Merchant LLC in New York, called the market movement "exaggerated," noting that the bullish data led traders to cover short positions -- essentially bets that crude prices would fall -- and that the storm led to nervous buying.
Hurricane Ivan intensified early yesterday to Category 5, the most powerful.
It packed sustained winds of 160 mph as it passed north of the Caribbean islands of Aruba, Bonaire, and Curacao.
Hurricane-induced buying was intensified by the Department of Energy report that US commercial crude inventories fell by 1.4 million barrels in the past week, to 285.7 million barrels.
Even more of a surprise to investors, analysts said, was the drop in total motor gasoline stocks, from 206.6 million barrels to 204.1 million.
October gasoline rose 4.37 cents to settle at $1.2254 per gallon on the Nymex yesterday.