Oil Prices Surging Toward $80

New York, NY, Oct. 16, 2009--Oil prices were up to near $78 a barrel Friday, continuing a weeklong rally amid an unexpected drop in U.S. gasoline inventories.

By mid-afternoon in Europe, benchmark crude for November delivery was up 10 cents at $77.68 in electronic trading on the New York Mercantile Exchange. Earlier in the session, it rose as high as $78.17. On Thursday, the contract rose $2.40 to settle at $77.58.

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.

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."