Tuesday August 3, 6:37 pm Eastern Time
Oil finds little cheer in stocks
draw; Big Oil shares up
By Haitham Haddadin
NEW YORK, Aug 3 (Reuters) - Oil eased further in
Tuesday's aftermarket as bearish increases in refined
U.S. oil product stocks took the cheer out of a bullish
draw in crude inventories in the world's biggest oil
consumer.
Meanwhile, energy company shares were mixed but with
gains in ''Big Oil'' boosting sectoral indices. Wall Street
finished up after mixed trade that saw blue chips gain but
technology shares slide on worries over possible interest
rate hikes.
Despite forecasts of draws in weekly U.S. gasoline and crude oil stocks, September
crude settled 15 cents lower at $20.30 a barrel on the New York Mercantile Exchange
as players pocketed profits from last Thursday's rise over $21.00.
But the contract shed five to nine cents more in electronic trade later despite a report
from the American Petroleum Institute (API) citing a deeper-than-expected drop of five
million barrels in crude stocks in the week ended July 30.
Forecasts had called for a two million barrel draw.
The APIs, released after the close of regular NYMEX trade, also showed a bearish 1.9
million barrel build in gasoline stocks versus analysts' expectations of a drop of about
1.2 million at the height of the U.S. summer driving season.
This combined with a larger-than-expected seasonal build in distillates stocks of 4.4
million barrels to pressure NYMEX products more in after-hours activity. September
delivery heating oil and gasoline closed a shade in the red earlier.
''It is a tug of war between the two,'' said a Warburg Dillon Read analyst, referring to the
crude and gasoline data.
''It's possible that given time crude will win but I'm not sure it will happen tonight,'' she
added.
Despite Tuesday's fall, oil markets on both sides of the Atlantic remain buoyed by
widespread confidence that major oil producers within the Organisation of Petroleum
Exporting Countries will adhere to output cuts agreed in March.
According to API, crude inventories are now some 17 million barrels below year-ago
levels in the United States, which imports a lot of the crude it consumes from OPEC
countries.
But one U.S. oil analyst viewed the Paris-based International Energy Agency's (IEA)
pending report on July OPEC production estimates and June world oil stocks as more
important than the APIs and Wednesday's U.S. Department of Energy data.
''The anticipation in June stocks will be less than May due to the cuts, despite June
being the last of the second quarter, always the weakest of the year for consumption,''
he said.
Energy share indices were net gainers although climbers and decliners among the oil
and gas firms were nearly at a par. In the wider market, the Dow Jones Industrial
Average finished a marginal 0.29 percent of 31.35 points up at 10,677.31.
With most oil majors realizing gains, the S&P International Oil Index (^SPOILI - news)
rose 1.33 percent to 958.93. Among the majors, Chevron (NYSE:CHV - news) led
gains, $1.75 up at $93.00, followed by Texaco (NYSE:TX - news), up $1.50 at
$61.8705, Exxon (NYSE:XON - news), up 94 cents at $78.81 and Mobil (NYSE:MOB -
news), up 81 cents at $101.3705.
The S&P Oil Index (^SPOILP - news) rose 0.92 percent at 63.87 as independents like
Coastal (NYSE:CGP - news) and Murphy Oil (NYSE:MUR - news) posted gains of 50
cents each at $40.50 and $49.19 respectively.
S& P refining index (^SPENRM - news), the laggard in gains so far this year due to bad
margins, gained 0.51 percent at 109.00.
Philadelphia Oil Services Index (^OSX - news) rose 0.80 percent at 79.53 as firms like
Halliburton (NYSE:HAL - news) and Schlumberger (NYSE:SLB - news) rose, $1.19 and
87.5 cents at $46.81 and $60.50.
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