Oil prices settle down after report shows gas and crude stocks rising, refinery improvement
NEW YORK (AP) – Oil prices ended lower Wednesday after a government report showed gasoline and crude inventories rising more than expected and refinery utilization improving last week. News that protests had ended at an oil facility in Nigeria also pressured prices.
The Energy Information Administration reported Wednesday that crude oil supplies rose by 1 million barrels last week to 342.2 million barrels. Analysts surveyed by Dow Jones Newswires expected crude stocks to rise by 500,000 barrels.
Gasoline stocks increased by 1.7 million barrels to 195.2 million barrels, above analysts’ expectations of a 900,000 barrel gain, but still well below the lower end of average for this time of year.
Distillate inventories, which include heating oil and diesel fuel, edged up 1 million barrels to 119.8 million barrels, less than the average analyst estimate of 1.2 million barrels.
Oil and distillate stocks remain at the upper end of average for this time of year.
Light, sweet crude for June delivery fell 62 cents to settle at $62.55 a barrel on the New York Mercantile Exchange, after falling as low as $61.90 a barrel during the session. The contract rose Tuesday following news that protests in Nigeria were cutting oil production by 170,000 barrels per day.
Brent crude for June delivery settled down 10 cents at $68.01 a barrel on the ICE Futures exchange in London.
Gasoline futures, however, edged up 3.54 cents to settle at $2.3370 a gallon as concerns over U.S. gasoline supplies still linger in the market.
“These are basically constructive numbers, seeing builds in inventories across the board,” said Tim Evans, an energy analyst at Citigroup Global Markets. “We’re climbing out of a deep hole, but we still have 5.6 percent less gasoline than a year ago, so it’s not clear that we’re out of the woods yet.”
A combination of high demand for gasoline and low supplies has left U.S. gasoline inventories at historically low levels heading into the peak summer driving season.
An unprecedented number of refinery outages this spring have pulled down U.S. gasoline supplies the past three months, and scattered reports of minor refinery outages continue to boost prices.
“We’ve probably had as many outages in the past 10 days than I can remember,” said James Cordier, an analyst at Liberty Trading Corp. in Tampa, Fla. “But the thought is that many of them will be up and running in the next couple of weeks and loosen up supplies of gasoline.”
The EIA reported that refinery utilization rose a half percent to 89.5 percent last week, but still lower than the average of 91 percent to 92 percent for this time of year, Cordier said. Gasoline production also rose to an average of 9.1 million barrels per day, the report said.
Unrest in Nigeria, Africa’s largest oil exporter and a major supplier to the United States, also has supported oil futures recently, although protesters on Wednesday abandoned a Royal Dutch Shell PLC oil facility they had occupied in Ogoniland since Thursday.
The attack was the latest incident in a series of bombings, kidnappings and protests that have slashed production by nearly 1 million barrels per day in Nigeria, representing around one-third of its total capacity.
In other trading, heating oil futures lost 2.32 cents to settle at $1.5670 a gallon on the Nymex, while natural gas prices rose 2.6 cents to $7.890 per 1,000 cubic feet.
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Associated Press Writers Gillian Wong in Singapore, and Pablo Gorondi in Budapest, Hungary, contributed to this report.
AP-ES-05-16-07 1539EDT