Oil prices climbed above $97 per barrel Wednesday on signs that the U.S. is consuming more fuel.
The government said Wednesday that diesel demand is sharply higher compared to a year ago. However U.S. consumption of other petroleum products — especially gasoline — is still weak.
Analysts said the data shows that farmers, shipping companies and other major U.S. industries are burning more fuel — evidence that the economy is gradually building up steam. U.S. supplies of distillates, a category that includes diesel and fuel oil, fell by 4.2 percent to 135.9 million barrels last week as demand increased nearly 4 percent from a year ago, according to the Energy Information Administration.
Supplies are expected to shrink further as temperatures drop and home owners along the East Coast use more fuel oil for heat.
“We’re sucking down distillates like crazy,” PFGBest analyst Phil Flynn said. “All of that fuel is going to have to be replaced, so oil is going up.”
Benchmark crude rose 40 cents to $97.20 per barrel in New York, while Brent crude fell 66 cents to $114.34 per barrel in London.