NEW YORK -- Oil futures spiked above $70 a barrel yesterday for the first time since Sept. 1 after a government report showed gasoline inventories dropped unexpectedly as the summer driving season neared its peak.
In its weekly inventory report Wednesday, the US Energy Department's Energy Information Administration said gasoline inventories dropped 700,000 barrels in the week ended June 22. Analysts polled by Dow Jones Newswires had expected a 1.1 million barrel gain.
Retail gasoline prices, meanwhile, broke a monthlong decline, holding steady overnight at a national average of $2.975 a gallon, according to the American Automobile Association and the Oil Price Information Service. Prices had been falling steadily since a May 24 peak of $3.227 a gallon.
Analysts said pump prices could rise again if there's an imbalance between demand and supply.
"Gasoline demand stays strong," said Paul Horsnell, an analyst at Barclays Capital. "While it is still early in the driving season, June demand has now moved close to the all-time record for any month."
After rising as high as $70.52 and trading above $70 for several hours, light, sweet crude for August delivery closed the day's trading up 60 cents at $69.57 a barrel on the New York Mercantile Exchange. The front month contract last settled above $70 on Aug. 31.
Gasoline futures for July rose 1.21 cents to settle at $2.2667 a gallon on the Nymex. Brent crude for August delivery fell a cent to settle at $70.52 a barrel on the ICE Futures exchange in London.
In other Nymex trading, July heating oil futures slipped 0.63 cent to settle at $2.0183 a gallon. Natural gas prices for August delivery plunged 42.8 cents to settle at $6.655 per 1,000 cubic feet. A government report yesterday showed natural gas inventories rose 99 billion cubic feet last week, more than analysts expected.