Oil prices soared by 89 cents a barrel on the New York Mercantile Exchange on Wednesday and broke through the critical $15 barrier to the highest level in almost three months.
Analysts attributed the buying spree to an American Petroleum Institute report that the nation's gasoline stocks had declined for the eighth straight week because of strong motorist demand.
Traders said oil prices also were bolstered by reports that an Iraqi air strike had damaged Tehran's 200,000-barrel-a-day refinery in a sharp escalation of the 6-year-old war between the OPEC nations.
On the New York Mercantile Exchange, West Texas Intermediate--the benchmark U.S. crude for immediate delivery--jumped 89 cents to $15.21 a barrel. It was the highest close since the crude finished at $16.01 a barrel on Feb. 14.
The domestic crude roared through a key resistance level of $15 a barrel at mid-morning on the Merc and faced the next important test at the $15.50 mark, traders said. It hit a high of $15.34 on Wednesday before retreating.
The rally was driven by heavy trading in gasoline futures on the Merc. Unleaded gasoline for June delivery climbed 2.32 cents to 52.81 cents a gallon, and leaded gasoline shot up by 2.63 cents to 52.82 cents a gallon.
Late Tuesday, the American Petroleum Institute reported that U.S. gasoline stocks dropped another notch last week even though inventories usually build up at this time of year in preparation for the peak summer driving season.
The weekly API figures showed that gasoline stocks were at 206 million barrels, an unexpected large drop from the week before.