Updated Wed Oct 7 09:28 ET
NYMEX Oil Pre-opg: Seen lower on mixed crude stock reports
OPENING CALL: Crude oil futures: Down 10-15 cents per barrel
Heating oil: Down 50-75 points per gallon
Gasoline: Down 50-75 points per gallon
By Peter Rosenthal, Bridge News
New York--Oct 7--NYMEX energy futures are expected to move lower today
following divergent reports on crude stockpiles from the American Petroleum
Institute and the US Department of Energy. While the API data showed a
smaller-than-expected drawdown, the DOE reported an increase in crude
stocks last week.
* * *
The DOE reported a 2.7-million barrel rise in crude stockpiles, while
the API data showed a draw of 3.94 million barrels. Expectations had been
for a significant decrease in inventories due to Hurricane Georges affect
on crude imports and production in the US Gulf of Mexico early last week.
Gasoline stockpiles fell 1.82 million barrels according to API, while
the DOE data showed a more modest 400,000-barrel-decrease in stocks.
The number many participants were focussing on this morning was the
7.5-percentage-point drop in US refinery utilization rates, and a 12.3-
percentage-point in runs on the East Coast. While a decrease had been
expected in the Gulf Coast because of flooding associated with the
hurricane, the East Coast figures were surprising.
It has left brokers uncertain of how trading will go today, a broker
said.
"We've never seen refiner (numbers like these)" a broker said. "It's a
crap shoot. What do the people in the pits think?"
Overall, because a sharp drawdown in crude and gasoline stockpiles had
been anticipated, the market should test key support levels today. Nov
crude has initial support at $15.11, then $14.97-$15.00.
"Buyers can fairly comfortably sit back and say I have a better
opportunity to buy (later)," a broker said, an indication that the market
will be weak.
Other brokers have shrugged off the inventory reports this week
altogether because the hurricane was so dominant for 3-4 days.
"The numbers are kind of false all together," a broker said.
NYMEX Nov crude (CLX8) ended the overnight Access session down 9c at
$15.41. Nov heating oil (HOX8) ended down 32 points at 42.05c, while Nov
gasoline (HUX8) ended down 32 points at 47.05c. IPE Nov Brent crude (OILX8)
last was down 10c at $14.02.
UPCOMING:
--NYMEX Nov crude options expire Oct 15; Nov crude futures expire Oct 20.
Nov product options expire Oct 27; while Nov product futures go off the
board Oct 30.
--Iraq Deputy Prime Minister Tariq Aziz is to meet again with UN Secretary
General Kofi Annan today.
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