U.S. inventories unexpectedly drop, oil hits seven-year high

Oil prices hit new highs after a U.
S.
government report showed an unexpected drop in crude inventories, easing concerns that higher oil prices will dampen demand
.

Futures in New York rose 1.
3% to a seven-year high, after falling as much as 1.
2% on Wednesday
.
Domestic crude inventories fell by 431,000 barrels last week, according to a report from the U.
S.
Energy Information Administration
.
The American Petroleum Institute, which enjoys industry funding, said on Tuesday that crude inventories rose by 3.
29 million barrels
.

“This is just one sign of a continued economic recovery, and the nature of crude-related products and the role they play in that recovery, has a significant impact on demand destruction,” said Rob Thummel, portfolio manager at Tortoise, which manages about $8 billion in energy-related assets.
The concern is not obvious
.
"

Oil prices rose due to an energy crisis triggered by shortages of coal and natural gas and a rebound in demand in economies recovering from the pandemic
.
Wall Street has been steadily raising its estimates for oil prices in recent weeks
.
BNP Paribas was the latest bank to do so, raising its forecast by $8 to $80.
50 a barrel
.

The U.
S.
report also showed strong inventories of refined products and rising demand for distillates and gasoline despite higher consumer prices
.
Gasoline inventories fell by 5.
37 million barrels to their lowest level since November 2019
.
Measured on a four-week average, gasoline demand at this time of the year is the highest since 2007
.

price:

West Texas Intermediate crude for November delivery rose 91 cents to $83.
87 a barrel on Wednesday
.
The more active December contract rose 98 cents to $83.
42 a barrel;

Brent settled up 74 cents at $85.
82 a barrel for December
.