1/26 6:57 Crude Oil Rises After U.S. Heating Oil Inventories Plunge
By Dudley White
Crude Oil Rises After U.S. Heating Oil Inventories Plunge
London, Jan. 26 (Bloomberg) -- Crude oil rose more than 1
percent, extending two weeks of gains, after a report showed U.S. supplies of heating oil and other fuels posted their biggest drop in almost four years because of freezing weather.
U.S. inventories of distillate fuel, including heating oil
and diesel, fell by 8.3 million barrels, or 6.7 percent, the
biggest drop since February 1996, the American Petroleum Institute said. Analysts surveyed by Bloomberg News estimated declines ranging from 2.5 million barrels to 6 million barrels.
``The API report was very bullish,' said Mark Keenan, an oil broker with Prudential Bache (Futures) Ltd. ``Heating oil has been dominating the market for the past few days.'
Brent crude oil for March settlement rose as much as 41
cents, or 1.5 percent, to $26.95 a barrel on the international Petroleum Exchange. Crude oil for March delivery on the New York Mercantile Exchange was recently 30 cents higher at $28.58 a barrel in electronic trading.
Crude oil in London has risen in 11 of the past 13 trading
sessions as cold weather blanketed the U.S. Northeast, the
nation's biggest consuming region for heating oil. Oil prices are close to their highest level since the 1991 Persian Gulf War.
Prices for gasoil, a group of fuels that includes heating
oil, also surged. Gasoil for February delivery rose as much as $8, or 3.5 percent, to $234 a metric ton on the IPE.
Within the distillate fuel category, heating oil inventories
fell 5.2 million barrels to 48 million barrels, the lowest in more than two years, the API said. Distillate inventories after the decline totaled 114.7 million barrels.
Crude oil inventories fell by 3 million to 291.6 million
barrels, the API said.
Increased demand for heating fuel comes at a time when some
oil-exporting nations indicate they want to extend output cuts that in 1999 led crude oil prices to more than double. The program of cuts agreed to last year by the Organization of Petroleum Exporting Countries is due to expire March 31.
Saudi Arabia and Norway, the world's two largest oil
exporters, agreed to maintain self-imposed oil output cuts until the end of March though made no commitment to keeping them longer, Saudi's official SPA news agency reported.
Saudi Arabia's oil minister, Ali al-Naimi, and his Norwegian
counterpart, Marit Arnstad, acknowledged the `fundamentals' show a more balanced oil market but warned producers to maintain ``vigilance' with output quotas to keep oil prices high, SPA said. The two met in Riyadh, Saudi Arabia. |
