Supply data put pressure on oil, gas -->
By Myra P. Saefong, CBS.MarketWatch.com
Last Update: 1:00 PM ET May 31, 2001
NEW YORK (CBS.MW) -- Gasoline futures prices briefly dropped under $1 a gallon for the first time in two weeks Thursday after two key reports on U.S. petroleum supplies revealed a bigger-than-expected rise in stocks of the fuel.
FRONT PAGE NEWS
U.S. stocks higher but stuck in tight band
Jobless claims rise for third week in a row
Xerox accounting review done, missteps ackowledged
P&G inks $300 million ad deal with Viacom
Market news and more! Sign up to receive FREE email newsletters
Get the latest news
24 hours a day from our 100-person news team.
Shares of oil companies saw mostly mixed trading.
Gasoline inventories rose by 1.6 million and 4.3 million barrels, respectively, for the latest reporting week, according to data compiled separately by the American Petroleum Institute and the Energy Department.
On average, analysts polled by Bridge News had expected a rise of only 1.2 million barrels.
The API also said stocks of reformulated gasoline, which are used in many major cities in the U.S., climbed by 1.8 million barrels, while the Energy Department reported a 2.3-million-barrel rise.
"Just as the summer driving season kicks off, additions to gasoline stocks lead to some relief in the gasoline market," said Thorsten Fischer, an economist at Philadelphia-based Economy.com, in a weekly note. He pointed out that gasoline supplies stand 3 percent above their year-ago level.
Still, any "year-on-year surplus will disappear quickly," Fischer said, if it turns out that there are problems with reliability of refinery operations.
This, he said, stands as a "key issue" with the nation's refineries running virtually flat out. The API's measure of refinery production rose slightly to 95.3 percent of capacity from the prior week's reading of 95.2 percent.
June unleaded gasoline dropped to a low at 98.50 cents a gallon, but was last at $1.02, down 2.12 cents in recent trading and June heating oil shed 1 cents to 76.60 cents a gallon on the New York Mercantile Exchange.
The July contracts, which will become the front-month contracts for the petroleum products, also declined. July unleaded gasoline fell by 2.32 cents to 92.30 cents a gallon. July heating oil fell 1.54 cents to 76.30 cents a gallon.
Distillate supplies, which include heating oil, increased by a respective 1.9 million barrels and 2.2 million barrels on the week, the API and Energy Department said. Regardless, this was more than triple expectations for a rise of 600,000 barrels.
Crude inventories fall unexpectedly
Refiners' struggle to keep up with the demand for gasoline during the summer driving season helped prompt a decline in last week's crude supplies.
Crude inventories as of the week ended May 25 fell unexpectedly -- by 3.98 million and 1.8 million barrels, according to the API and Energy Department, respectively. Analysts surveyed by Bridge News had forecast a rise of 1.2 million barrels on average.
However, July crude shed 65 cents to $27.90 a barrel in sympathy with gasoline's price decline.
In related news, July natural gas declined by 12.1 cents to $3.86 per million British thermal units following a 99-billion-cubic-foot rise in last week's stocks. See related story.
Oil issues mixed
Following the results of the latest inventory reports, key oil indexes saw mixed trading.
The Oil Service Index (OSX: news, msgs, alerts) gained 1.1 percent to 125.7 as shares of Nabors Industries (NBR: news, msgs, alerts) tacked on $1.49 to trade at $50.93.
Meanwhile, the CBOE Oil Index (OIX: news, msgs, alerts) declined by 0.1 percent to 341.602. Shares of Total Fina (TOT: news, msgs, alerts) decreased by $1.03 to stand at $73.83.
And the Amex Natural Gas Index (XNG: news, msgs, alerts) rose by 0.2 percent to 245.76. Shares of EEX Corp. (EEX: news, msgs, alerts) climbed 9 cents to trade at $4.18. |
