Gasoline prices soar on supply drop
By Myra P. Saefong, CBS.MarketWatch.com
Last Update: 5:02 PM ET Aug. 28, 2001
NEW YORK (CBS.MW) -- A huge drop in last week's U.S. gasoline inventories lifted gasoline futures prices above 85 cents a gallon in after-hours trading Tuesday to their highest level in over two months.
Gasoline inventories fell by 6.8 million barrels for the week ended Aug. 24, the American Petroleum Institute reported late Tuesday. Analysts expected a fall of less than half that, according to a Bridge News survey.
The "main story is the incredible strength in gasoline demand," said Phil Flynn, a senior energy analyst Alaron.com in Chicago. The drop in gasoline inventory "can be nothing less than stunning," he said, especially in the face of a slowing economy.
Meanwhile, crude stocks rose by 2 million barrels, the API said. Analysts had been unsure whether inventories rose or fell, projecting a range from a 2 million barrel drop to a 2 million barrel increase
Additionally, distillate supplies, which include heating oil, tacked on 1.2 million barrels. Analysts were looking for a rise or fall of about 500,000 barrels.
In after-hours trading shortly after the data were released, September gasoline rose 1.24 cents to 85.75 cents a gallon, a level not seen since June. October crude rose 3 cents to $27.20 a barrel and September heating oil rose 0.32 cent to 77.8 cents gallon.
The API also said refinery production capacity fell to 92.2 percent from the prior week's 92.5 percent.
Ahead of the news on the New York Mercantile Exchange, crude for October delivery gained 50 cents to close at $27.17 a barrel. September gasoline added 0.69 cent to 84.51 cents a gallon and September heating oil climbed by 2.47 cents to 77.48 cents a gallon. Also during the regular trading session Tuesday, September natural gas reached a 19-month low.
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