Oil Rises, Gasoline Climbs to a Record, on U.S. Supply Decline

April 9 (Bloomberg) -- Crude oil rose above $111 a barrel in New York and gasoline surged to a record after a government report showed that U.S. supplies unexpectedly dropped.

Crude oil inventories fell 3.15 million barrels to 316 million last week, the first decline since February, the Energy Department said. A 2.3-million-barrel gain was forecast, according to a Bloomberg News survey. Supplies of gasoline and distillate fuel, including heating oil and diesel, also fell.

``The crude stock draw was obviously the big surprise and leaves supplies too tight for comfort,'' said Antoine Halff, head of energy research at New York-based Newedge USA LLC. ``Refineries are operating at a very low rate and we still didn't get an inventory gain.''

Crude oil for May delivery rose $2.71, or 2.5 percent, to $111.21 a barrel at 10:50 a.m. on the New York Mercantile Exchange. Prices are up 81 percent from a year ago. Futures prices rose to a record $111.80 a barrel on March 17.

Gasoline for May delivery climbed 5.8 cents, or 2.1 percent, to $2.8084 a gallon. Futures reached $2.8228, an intraday record for gasoline to be blended with ethanol, known as RBOB, which began trading in October 2005.

U.S. pump prices are following futures higher. Regular gasoline, averaged nationwide, rose 1.2 cents to a record $3.343 a gallon, AAA, the nation's largest motorist organization, said today on its Web site.

Refineries operated at 83 percent of capacity last week, the Energy Department report showed. Plants used 88 percent during the same week last year. Refiners operated at 82.2 percent in the week ended March 21, the lowest since October 2005, the department said.

The Energy Department released its weekly report on inventories at 10:30 a.m. in Washington.

Brent crude for May settlement rose $2.31, or 2.2 percent, to $108.65 a barrel on London's ICE Futures Europe exchange. Futures reached a record $108.02 a barrel on March 14.