Oil extends rally, jumps above $78 in Asia, as US gasoline supplies drop

Oil rises above $78, extends week-long rally

SINGAPORE — Oil prices continued a weeklong rally Friday in Asia, jumping above $78 a barrel, after U.S. gasoline inventories unexpectedly fell.

Benchmark crude for November delivery rose as much as 59 cents to $78.17 before slipping back to $78.03 by midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $2.40 to settle at $77.58 on Thursday.

The Energy Information Administration said Thursday that U.S. gasoline supplies fell 5.2 million barrels while analysts had expected a jump of 1.6 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Crude supplies rose 400,000 barrels, the EIA said, while analysts had anticipated an 2.2 million barrel gain.

Until this week, oil had bounced between $65 and $75 since May.

“The transition to a $70 to $80 range is now in full cry,” Barclays Capital said in a report. “We expect further transitions upward to occur in line with improvements in the underlying market data.”

A falling U.S. dollar has also helped boost oil this week.

In other Nymex trading, heating oil was steady at $2.02 a gallon. Gasoline for November delivery held at $1.95 a gallon. Natural gas for November delivery jumped 3.0 cents to $4.51 per 1,000 cubic feet.

In London, Brent crude for December delivery rose 22 cents to $76.45 on the ICE Futures. exchange.