March 27, 2008	Thursday	Rabi-ul-Awwal 18, 1429

NEW YORK, March 26: Oil jumped above $105 a barrel on Wednesday, after a US government report showed larger-than-expected drops in fuel stocks and declining fuel production in the world’s top oil consumer.

US crude rose $3.87 to $105.09 a barrel by 1726 GMT, extending a 36-cent gain on Tuesday. It has fallen from a record high of $111.80 reached on March 17. London Brent added $2.89 at $103.49.

“Today’s numbers are a nice bullish surprise and come on a day when the other commodities are picking up as well,” said Mike Zarembski, analyst at optionsXpress in Chicago.

Gasoline inventories fell by 3.3 million barrels as US refiners slowed their production to the lowest levels seen since October 2005, when several refineries were knocked offline by hurricanes Katrina and Rita, US Energy Information Administration data showed.

The drop in gasoline stocks was more than triple the 800,000-barrel decline expected. Distillates dropped 2.2 million barrels, also more than forecast.

Crude oil inventories also bucked expectations. Stocks were expected to rise by 1.7 million barrels last week, but were unchanged.

“Lower-than-expected imports for crude, coupled with a major drop-off in refinery runs, driven by weak crack spreads and maintenance, were the catalyst for lower builds for crude and a much bigger-than-expected drop in gasoline inventories,” said Chris Jarvis, senior analyst at Caprock Risk Management in Hampton Falls, New Hampshire.—Reuters