December 21, 2006	Thursday	Ziqa'ad 29, 1427

LONDON, Dec 20: World oil prices advanced on Wednesday as traders seized on news that crude reserves in the United States slumped more heavily than expected last week. New York's main contract, light sweet crude for delivery in February, rose 54 cents to $64 per barrel in pit trading, after earlier touching a three-month peak of 64.15.

In London, Brent North Sea crude for February delivery won 65 cents to $63.46 in electronic deals.

The US Department of Energy said on Wednesday that inventories of crude oil slumped 6.3 million barrels to 329.1 million in the week ended December 15.

That was more than triple the decline expected by most analysts who had predicted a drop of just 2 million barrels.

“Overall ... the numbers are still supportive for the market,” said Alaron Trading Corp broker Phil Flynn.

Levels of distillate products, such as heating oil and diesel fuel, increased by 1.2 million barrels to 133.1 million over the week. Analysts had expected a drop of 600,000 barrels.

Gasoline reserves rose 1 million barrels to 200.9 million, the DoE report showed, against forecasts that gasoline inventories would remain unchanged.

Crude futures had rebounded strongly on Tuesday as the market reacted to thick fog barring Gulf of Mexico tankers from a busy shipping channel in Texas.

“Crude futures were a little firmer (on Wednesday),” said Sucden analyst Michael Davies.—AFP