U.S. crude oil and gasoline stockpiles fell sharply last week, according to a U.S. Energy Information Administration report, with crude down 2.1 million barrels and gasoline off 4.3 million barrels.

“Week over week, the report is very bullish,” said Phil Flynn of Alaron trading in Chicago.

“There are still questions over the economy, whether these prices can be sustained, which is why we will probably return to the stock market to see if there are any signs of economic help.”

Stock market strength has supported crude prices in recent months, helping lift them from lows below $34 a barrel on optimism any rebound in the economy could spur fuel demand. The Dow industrials briefly turned negative on Wednesday as bank stocks extended losses, while the S&P 500 and Nasdaq trimmed gains.

Weak demand has sent crude prices off record highs over $147 a barrel struck last July.

Fire struck gasoline-making units at two U.S. refineries this week, triggering a roughly 8 percent spike in U.S. gasoline futures on Tuesday as the United States gears up for the Memorial Day holiday on Monday, traditionally the start of summer driving season.

Data from Japan showed gasoline inventories at their lowest level since September 2007 and kerosene stocks declining to a near three-year low in part due to strong sales.

Further strength has come from unrest in OPEC member Nigeria, Africa’s top oil and gas exporter. Shooting broke out in the Nigerian oil port city of Warri on Wednesday following days of military helicopter and gunboat raids on militant camps in the surrounding creeks.

Top Italian oil and gas company ENI SpA declared force majeure for its Brass River export terminal in Nigeria, adding its output affected so far was 9,000 barrels per day.

The Algerian oil minister said the Organization of the Petroleum Exporting Countries (OPEC), which has agreed to cut 4.2 million bpd of output since September to prop up prices, has no reason to cut output again when it next meets on May 28.

The International Energy Agency said the economic downturn is cutting investment in energy supply, raising the risk of higher prices in future that could hamper any recovery.

NEW YORK, May 20 (Reuters)

“As opposed to dollar speculators,” says Doug Casey, “oil traders took the gloomy economic news for what it was, gloomy.”

“Further, ‘prices are correcting from yesterday’s record high of $120 per barrel as BP Plc prepares to restart its Forties pipeline after a two-day shutdown,’ said analysts at Action Economics. The 700,000 barrel-a-day crude oil pipeline system in the North Sea should be back on line within a few days.”