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Brent futures were steady above $107 a barrel today, as the US distillate stockpile plunged three-and-a-half times more than expected, boosting demand for heating oil and helping crude benchmark to its highest level in seven weeks.

Brent crude rose by six cents to $107.64 a barrel, while US oil was up by 24 cents to $97.56, reported Reuters.

According to the US Energy Information Administration (EIA), the country’s distillate stocks dropped 3.21 million barrels in the week ended 17 January 2014, in comparison with an expected 900,000 barrel draw, while its demand rose 5.2% from a year earlier to 3.46 million barrels over the past four weeks.

Poised for their biggest gain in five weeks, Brent futures were also supported by the diesel shipments that European refiners have made to the world’s biggest oil consumer.

Data showed that the US is importing around 500,000t of heating oil and diesel this month from Asian, European and Russian refiners, with at least a dozen tankers booked so far in January to ship gasoil and diesel.

Besides this, the American Petroleum Institute’s (API) report also showed a 5.8% year-on-year increase in US petroleum product demand in December to 19.2 million barrels per day, which reflects a continued improvement in domestic manufacturing and the broader economy.

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By GlobalData

Gasoline demand rose 4.5% to 8.8 million barrels, while fuel production went up to a record 9.4 million barrels per day and was just 66,000bpd below an all-time high, said the report.

Traders are also eagerly waiting for an early end to the Syrian crisis, which could provide some relief to the markets over supply disruption concerns.

The leader of the Syrian opposition delegation laid out his demands for talks on ending the civil war, calling for a transitional government to be set up in the country that does not include President Bashar al-Assad.

Image: US distillate stocks dropped 3.21 million barrels in the previous week. Photo: courtesy of Victor Habbick at