Oil Rises as U.S. Gasoline Inventories Tumble Most in 12 YearsApril 13 (Bloomberg) -- Crude oil rose after a U.S. government report showed inventories of gasoline plunged the most in 12 years as demand climbed and refineries idled units.Futures advanced 0.8 percent after the Energy Department said gasoline supplies dropped 7 million barrels to 209.7 million last week. Stockpiles were forecast to decline by 1 million barrels, according to the median of 17 analyst estimates in a Bloomberg News survey. Consumption of the fuel climbed the most in more than five months.“The report today was very interesting because the draw in gasoline stocks was seven times bigger than what people expected,” said Sean Brodrick, a natural resource analyst with Weiss Research in Jupiter, Florida. “High prices haven’t had enough of an impact on demand to end the bullish trend.”Crude oil for May delivery increased 86 cents to settle at $107.11 a barrel on the New York Mercantile Exchange. Prices are up 27 percent from a year ago.Gasoline for May delivery climbed 7.83 cents, or 2.5 percent, to end the session at $3.2424 a gallon in New York.Crude oil slipped briefly as President Barack Obama called for an overhaul of the U.S. tax code for individuals and businesses and said he wants to raise an additional $1 trillion through tax increases over the next decade. The president spoke at George Washington University in the capital.Obama urged Congress to raise cash by eliminating so-called tax expenditures, which would generate revenue that could be used to reduce tax rates and also increase the government’s take from the economy. He didn’t provide details about which tax breaks he would curtail or eliminate.Gasoline StockpilesThe drop in gasoline inventories was the largest on a per- barrel basis since Oct. 9, 1998. Gasoline supplies have slipped 31.4 million barrels, or 13 percent, in the past eight weeks, the report showed. It’s the longest stretch of declines since the summer of 2008 when prices were at a record.Demand for the fuel rose 3.7 percent to 9.18 million barrels a day, the biggest increase since the week ended Oct. 22, the report showed.Refineries operated at 81.4 percent of capacity, down 3 percentage points from the prior week. It was the lowest level since February. An 0.5 percentage-point increase was forecast in the Bloomberg news survey.Inventories of crude oil rose 1.63 million barrels to 359.3 million, the department said. Supplies were forecast to increase by 1 million barrels.Stockpiles at Cushing, Oklahoma, the delivery point for New York-traded West Texas Intermediate crude oil, gained 26,000 barrels to 41.9 million, the highest level since at least 2004 when the department began tracking stockpiles at the hub.‘Plenty of Oil’“We have plenty of oil,” said Philip Silverman, a principal at Kingsview Management LLC, a commodity trading adviser in New York. “There are record stockpiles at Cushing, which shows that we’re not primarily trading on inventories.”Prices have advanced 17 percent this year as unrest spread from Tunisia to Egypt, Libya, Yemen, Bahrain and Syria. Elections in Nigeria this month may lead to decreased output from Africa’s top crude-producing country.Libyan rebels require further support to defend civilians against the forces of Muammar Qaddafi, allied nations said following a meeting in Qatar. A United Nations resolution authorizing a no-fly zone over Libya provides for self-defense and Qatar would “look into” supplying equipment for this, Qatari Prime Minister Hamad bin Jasim Al-Thani said today.‘Short-Sighted’ Trade“It’s very short-sighted to trade on inventory data for last week when the main factor driving the market is geopolitical risk,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York.Brent oil for May settlement climbed $1.96, or 1.6 percent, to end the session at $122.88 a barrel on the London-based ICE Futures Europe exchange.Oil prices are likely to remain “high” as the impact on fuel demand from this year’s rally will probably be limited, according to Bank of America Merrill Lynch. Prices may temporarily exceed $140 a barrel in the next three months as consumption expands “rapidly” and armed conflict curbs supplies from Libya, according to the Merrill report dated yesterday.Crude oil also rose after the Commerce Department said U.S. retail sales climbed in March for a ninth consecutive month, showing the improving job market is helping Americans cope with higher costs for fuel and food.Purchases increased 0.4 percent following a 1.1 percent February gain that was larger than previously estimated, government figures showed today in Washington.Retail Sales“The retail sales today show that consumers aren’t pulling back, which is a good sign for the overall economy and demand,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston.Oil volume in electronic trading on the Nymex was 902,115 contracts as of 3:12 p.m. in New York. Volume totaled 1.09 million contracts yesterday, 36 percent above the average of the past three months and the highest level since Feb. 24. Open interest was 1.58 million contracts the most since March 14.To contact the reporter on this story: Mark Shenk in New York at [email protected] .To contact the editor responsible for this story: Dan Stets at [email protected] .Find out more about Bloomberg for iPad: http://m.bloomberg.com/ipad/