New York, July 15 (Bloomberg) -- Crude oil rose to a five-
week high, reaching $15 a barrel for the first time since early
June, after the American Petroleum Institute said U.S. stockpiles
fell more than unexpected last week.
''The consensus is that the API stats were good,'' said Alan
Struth, chief economist at Phillips Petroleum Co. in
Bartlesville, Oklahoma. ''Probably a move back to $14 (a barrel)
is more justifiable than a move to $16, but if it did (rise), we
wouldn't complain.''
The API report said crude inventories fell 6.3 million
barrels to 334.7 million. Analysts polled by Bloomberg News
expected a 180,000-barrel decrease. Demand for crude surged to
the highest in at least 19 years as refiners took advantage of
wide profit margins brought on by a steeper drop in crude prices
this year than gasoline.
August crude oil rose 32 cents, or 2.2 percent, to $14.87 a
barrel on the New York Mercantile Exchange, the highest closing
price since June 5. Prices rose as high as $15.02 a barrel in
early trading. In London, August Brent crude fell 9 cents to
$12.93 a barrel on the International Petroleum Exchange.
Refineries operated at 100.2 percent of their rated capacity
last week, as they processed cheap barrels that were bought as
crude fell as low as $11.42 a barrel, a 12-year low, in June.
Crude is down about 16 percent so far this year while gasoline is
down 11 percent. Refineries can run above their rated capacity by
opening units they don't normally used.
''Refiners will increasingly turn this inexpensive crude
into product as fast as they can for a real rosy quarter,'' said
Abe Glass, a trader at Spear, Leeds & Kellogg in New York.
''Soon, they're going to be locking in fabulous margins for all
of this oil in storage.''
August gasoline fell 1.06 cents, or 2.2 percent, to 46.94
cents a gallon on the Nymex after the API said stockpiles
unexpectedly rose last week. Gasoline stocks rose by 2.8 million
barrels to 221.4 million barrels, while analysts' expected a
decrease of 1.56 million barrels.
''Product stocks are still very, very ample,'' said Scott
Ryll, a trader at GSC Energy Corp. in Atlanta. ''There's an awful
lot of distillate and gasoline out there. That means refineries
will slow down and their appetite for crude will be down, too.''
Refiners today were buying crude oil futures to insure
against steep price increases for their raw material, and selling
gasoline futures before prices can fall lower, said Tim Evans, an
analyst at Pegasus Econometric Group in New York.
August heating oil rose 0.46 cent, or 1.2 percent, 39.32
cents a gallon.
The 7 percent rise in crude prices since Friday could be too
much, since promised production cuts by the Organization of
Petroleum Exporting Countries and other oil-exporting nations
will take months to reduce stockpiles.
''Stocks are high and the pOPEC cuuts won'ts very ssignificantly
affect the overhang until probablyy the fall,'' said Phillips'
Struth.
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