An off-shore drilling platform. Oil price steadily increase over the last few days and now hovering above $80 per barrel.

An off-shore drilling platform. Oil price steadily increase over the last few days and now hovering above $80 per barrel.

Oil prices rose for the third consecutive session Wednesday, with the key New York futures contract briefly breaching $80 after key data showed a steeper-than-expected drop in US stockpiles.

New York’s main contract, light sweet crude for December delivery, rose as high as $80.33 before closing up 44 cents to $79.58 per barrel.

London’s Brent North Sea crude for January gained 50 cents to settle at $79.47 a barrel.

The US Department of Energy (DoE) announced Wednesday that American crude reserves sank 900,000 barrels in the week ending November 13, more than the 600,000 barrels anticipated by the market.

American gasoline or petrol inventories tumbled by 1.7 million barrels, confounding expectations for a small gain.

The DoE added that stockpiles of distillates, which include diesel and heating fuel, fell 300,000 barrels. Analysts had pencilled in a bigger drop of 500,000 barrels.

However, analysts said the drop in inventory levels was exacerbated by Hurricane Ida, which weakened to a tropical storm earlier this month but led to the closure of some petroleum installations in the Gulf of Mexico.

“The DoE numbers showed a decline but it’s really due to the Hurricane Ida last week that delayed crude oil shipments into the Gulf (of Mexico) and shut in some production,” said analyst Andy Lipow of Lipow Oil Associates.

“There is a line of oil tankers waiting to discharge their cargo,” he said.

The enthusiasm surrounding the latest energy inventory data “was very tempered when people started looking at the distillate inventories, we actually built heating oil inventories, just where demand is expected to increase as we go into the winter,” Lipow said.

The US is the world’s biggest energy user and is seen as key to lifting oil demand which has been hit by the global economic slump.

Crude prices had soared $2.50 on Monday owing to a weak dollar and data showing that the Japanese economy expanded 1.2 percent in the July-September period, traders said.

It was the second straight quarter of expansion in the world’s second-largest economy.

Meanwhile, OPEC president Jose Maria Botelho de Vasconcelos has signalled that $75-$80 oil is an adequate level to allow for a global economic recovery.

The Organization of Petroleum Exporting Countries (OPEC) pumps about 40 percent of the world’s oil. — AFP