The price of crude oil and oil-related stocks rose sharply Wednesday after reports surfaced that there was an unexpected decline in U.S. petroleum inventories.
On Wednesday, oil for delivery in October rose as much as $1.58 US to $32.80 a barrel in New York.
The TSE's oil and gas sub-index rose 2.06 per cent, as the prices of many energy-related stocks jumped on the news.
Imperial Oil closed up $1.55 to $36.90, Alberta Energy rose $1.05 to $56.50, Talisman Energy ended at $50.75 up $1.25 and Anderson Exploration advanced $1.20 to $29.80.
The American Petroleum Institute reported that crude stocks in the U.S. for the week to August 18 sank 7.7 million barrels to 279.7 million barrels, which is just above a 24-year low. That's down 11 per cent from the same time last year.
Analysts say the data reinforces the fact that U.S. oil inventories are still falling despite OPEC's pledge to start replenishing low stockpiles in the West.
Oil has risen sharply from a 22-year low of less than $10 a barrel in 1998.
As well, the API said inventories of distillates, which include heating oil, fell 2.9 million barrels to 111.2 million, a deficit of 28 per cent versus last year.
Worries are starting to surface that there could be a shortage of heating oil in the U.S. this winter because of a big round of refinery maintenance.
OPEC ministers meet on September 10 and they are expected to raise production by at least 500,000 barrels a day.
Speaking to reporters Wednesday, U.S. President Bill Clinton said that crude oil prices were too high to sustain economic growth, and that they needed to fall to a range of low to mid-20-dollars US per barrel.
As well, Clinton added that he would raise the issue with OPEC members starting with Nigerian President Olusegun Obasanjo during his visit to the African nation this weekend.
Clinton said he would argue to the OPEC nations that if the price of oil remains too high, it will cause recession in other countries, who would then buy less of the cartel's crude.