COLUMBUS, Ohio — Oil prices jumped Thursday as new government data showed oil inventories fell unexpectedly.
Light, sweet crude for the April delivery rose $1.56 to $38.97 on the New York Mercantile Exchange. The vast majority of trades have shifted to April, with the March contract expiring Friday.
Benchmark crude for March delivery surged 6.7 percent, or $2.33, to $36.95.
Prices also were getting support by a weaker dollar compared with the euro. Oil tends to rise when the dollar drops as investors use the commodity as a hedge against inflation.
The Energy Information Administration said crude stocks decreased 200,000 barrels to 350.6 million barrels for the week ended Friday. Analysts had expected stock to grow by 3.5 million barrels, according to Platts, the energy information arm of McGraw-Hill Cos. Inventories have risen more than 30 million barrels in the prior six weeks.
Even with the decline, crude supplies remain ample and U.S. oil storage sites, including the main depot in Cushing, Okla., are brimming with crude, reflecting the drop-off in demand. Storage levels have been approaching marks last seen in the summer of 1990 when Iraq invaded Kuwait.
Yet a stunning drop-off in driving by Americans has led to growing levels of gasoline in storage.
Total gasoline inventories rose 1.1 million barrels last week compared with analyst projections of a decline of 1 million barrels. Distillate inventories declined by 800,000 barrels compared with projections of a decline of 1.5 million barrels.
The Department of Transportation said Thursday that motorists drove 3.8 billion fewer miles in December — when gasoline prices bottomed at $1.61 a gallon after reaching $4.11 in July — than they did in December 2007. The 1.6 percent decline in driving marks the 14th consecutive months of declining driving with the decline totaling 115 billion miles.
The lower driving figures reflect that fewer people are working. The Labor Department said Thursday that the number of unemployed workers receiving unemployment benefits jumped to an all-time high near 5 million, while new jobless claims remain well above 600,000.
The number of people receiving regular unemployment benefits edged up to 4.99 million, marking the fourth straight week those receiving benefits have been at a record level. The continuing claims figure also was higher than analysts expected.
Rising gas prices in January contributed to an unexpectedly large increase in inflation at the wholesale level in January. The government said wholesale prices increased by 0.8 percent last month, the biggest gain since last July and sharply above the 0.2 percent increase that economists had expected.
The acceleration was led by a 3.7 percent surge in energy prices with gasoline prices jumping by 15 percent, the biggest gain in 14 months.
After three consecutive weeks of rising daily retail prices that began in late January, gasoline prices began to fall Tuesday.
Prices at the pump dropped 0.8 cents a gallon overnight to $1.957, the third consecutive day of declines, according to auto club AAA, the Oil Price Information Service and Wright Express. Prices are 10.6 cents a higher than a year ago, but $1.104 lower than a year ago.
Meanwhile, natural gas storage levels in the U.S. dropped less than expected last week, and remain well above year-ago levels. Utilities and industrial customers are some of the biggest users of natural gas.
The agency said in its weekly report that natural gas inventories held in underground storage in the lower 48 states fell by 24 billion cubic feet to about 2 trillion cubic feet for the week ended Friday.
Analysts had expected a drop of between 56 billion to 61 billion cubic feet, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
If there was a sliver of hopeful economic news, it was the second straight increase of one measure of economic activity.
The New York-based Conference Board says its January index of leading economic indicators rose 0.4 percent. Economists surveyed by Thomson Reuters expected no change in the index, which forecasts economic activity for the next three to six months based on 10 economic components, including stock prices, building permits and initial claims for unemployment benefits.
Last month's gain compares to a 0.2 percent increase in December and a drop of 0.7 percent in November. Those measures were revised down from prior estimates.
Conference Board economist Ken Goldstein says the "intensity" of the recession could begin to ease in the next few months.
In other Nymex trading, gasoline futures fell 1.3 cents to $1.052 a gallon. Heating oil gained 3.2 cents to $1.1788 a gallon, while natural gas for March delivery fell 15.2 cents to $4.062 per 1,000 cubic feet.
In London, the March Brent contract rose $1.51 to $41.06 on the ICE Futures exchange.
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Associated Press writers Jake Neubacher in Vienna, Alex Kennedy in Singapore and Martin Crutsinger contributed to this report.