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Optimism on economy helps push oil to six-month high

May 6, 2009 | 11:14 am

For months, oil-market bears have been pointing at rising crude inventories and predicting that prices would stay subdued.

They’ve been wrong. Today, oil jumped above $56 a barrel for the first time since November, despite another increase in U.S. supplies.

Near-term crude futures in New York rose as high as $56.47 a barrel and were recently trading at $56.02, up $2.18 from Tuesday’s closing level.

Oilrighbakersfield The government’s weekly report on crude inventories showed a jump of 605,000 barrels, to 375.3 million, the highest since 1990. But that was far less than the 2.5-million increase that analysts surveyed by Bloomberg News had expected.

More surprising was that gasoline inventories fell 167,000 barrels to 212.4 million, instead of the 550,000-barrel gain that was expected.

Traders who’ve been bullish on oil have been taking their cue in part from economic data suggesting that the recession is bottoming. There was more evidence of that today: The monthly employment report from ADP Employer Services estimated that U.S. payrolls fell by 491,000 last month, far less than the 645,000 job cuts that had been expected.

The ADP report always precedes the official government data on job gains or losses, due on Friday.

"The speculators are piling into oil on signs that the economy is recovering," Sean Brodrick, natural resource analyst with Weiss Research in Jupiter, Fla., told Bloomberg.

They’re betting on rising demand, but there are few signs of that so far.

From Bloomberg:

Total daily fuel demand in the U.S. averaged 18.2 million barrels in the four weeks ended May 1, down 7.9% from a year earlier, according to the Energy Department. It was the lowest consumption level for a four-week period since May 1999.

-- Tom Petruno