June 2, 2005 4:00 PM, EDT

Crude Oil Price Drops Below $54; DOE Cites High Diesel Demand

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rude oil prices surged past $55 a barrel Thursday before receding, following a Department of Energy report that showed distillate demand, which includes diesel, rose 7.7% last week.

Benchmark light sweet crude oil futures closed at $53.63 a barrel, down 97 cents from Wednesday's close, Bloomberg reported. They had reached $55.40 in intraday trading.

Thursday's trading followed a $2.63 increase Wednesday that was the biggest single-day gain in nearly six months, Bloomberg reported.

Meanwhile, DOE's weekly inventory report released Thursday showed gains in its three petroleum categories.

Crude oil stocks rose 1.5 million barrels, gasoline rose 1.3 million barrels and distillates gained 780,000 barrels, DOE said.

(Click here for previous coverage.)