Crude Closes Higher After Stocks Drop

Crude oil closed sharply higher in New York last night, finishing at $72.51/barrel after the US Energy Dept said that US inventories fell by 4.73 million barrels last week.

That was 2 million more than what the market had been expecting, and now puts stock levels at 332.8 million barrels, their lowest since January.

The news was a complete reversal from Tuesday's API report of a 631,000 barrel increase in crude stocks.

Some believe that the decline backs up all the current political talk about the recession being over. On the other hand the news that US refineries only operated at 86.9% of capacity last week might also have had a lot to do with it.

Either way, the news helped grains close well off session lows last night, and has spilled over into a bit of support in the overnight eCBOT market.