N.Y. Crude Rises as Industry, Government Reports Show Drop in U.S. Supply
Crude Oil Futures Rise Amid Reports of Falling U.S. Stockpiles
New York, March 3 (Bloomberg) -- Crude oil prices rose more
than 2 percent after reports of an unexpected drop in U.S.
inventories last week amid stronger demand from refineries.
Crude oil inventories fell 3.2 million barrels, or
1 percent, last week, the Department of Energy said before
trading began today. That corroborated a report late yesterday
from the American Petroleum Institute showing a decline of
5.9 million barrels, or 1.8 percent.
''The DOE report confirmed the large draw in crude and you
can see the reaction it's having in the market,'' said Gavin
Kosviner, futures trader at Citibank NA in New York.
Crude oil for April delivery rose as much as 28 cents, or
2.2 percent, to $12.79 a barrel on the New York Mercantile
Exchange. ''It looks like we're going to test the $13 area,''
Kosviner said.
In London, Brent crude rose as much as 20 cents to $11.20 a
barrel on the International Petroleum Exchange.
U.S. refinery operations sped up last week, to 94.5 percent
of normal capacity from 94.1 percent the week before, the API
said, contributing to the stockpile decline. The drop came as a
surprise to the majority of analysts surveyed by Bloomberg News,
who had predicted an increase.
Both inventory reports also showed a drop in supplies of
gasoline, which becomes increasingly important as winter ends and
the peak-demand warm-weather driving season approaches.
Distillate fuel inventories, which include heating oil, rose
by 347,000 barrels according to the API, though the DOE report,
which is often more closely watched by traders, showed a decline
of 1.2 million barrels.
U.S. domestic crude oil production was steady at 5.8 million
barrels a day for a third straight week, according to the API.
That's the lowest rate since 1950, meaning less crude is
available for refiners to process.
April gasoline rose as much as 1.26 cents, or 3.3 percent,
to 39.70 cents a gallon on the Nymex while April heating oil rose
as much as 0.72 cent, or 2.2 percent, to 33.20 cents a gallon.
NYMEX crude, products jump early on stocks data
NEW YORK, March 3 (Reuters) - Crude oil and product futures jumped in midmorning trade Wednesday, lifted by bullish crude stockdraws in weekly inventory data, traders said.
At 1116 EST/1516 GMT, NYMEX April crude was up 19 cents at $12.70, easing a bit from an intraday high of $12.79. The contract opened at $12.65 and has touched an early low of $12.64.
Analysts pegged April crude resistance at $12.80, the contract's high on Feb. 25. Support is seen around $12.50.
The American Petroleum Institute reported a crude stockdraw of 5.9 million barrels for the week ended Feb. 26.
The API also reported a 1.5 million barrel downward revision for the previous week (Feb. 19), putting inventories nationwide last week at 326.75 million barrels, up by just 34,000 barrels from a year ago.
The U.S. Department of Energy "confirmed" the stockdraw in its status report early Wednesday, which showed that U.S. crude stocks dropped 3.2 million barrels.
Market participants said they expected the market to remain bullish for the short term.
"Overall though, the chart of stocks over the past few months suggests a rough supply/demand balance and we remain concerned that this will shift to a significant surplus for the second quarter if OPEC fails to cut output at their Vienna summit on March 23," said Tim Evans, senior analyst at Pegasus Econometric Group.
NYMEX front month heating oil gained 0.47 cent at 32.95 cents a gallon, after establishing an early range of 32.75/33.20 cents.
The API data showed an unexpected increase of 347,000 barrels, but players were leaning on the DOE's data showing a draw of 1.9 million barrels, traders said.
"The DOE data makes sense because we had a cold snap early last week," said a NYMEX trader, referring to the Northeast, the main heating oil consuming region.
April gasoline added 0.91 cent at 39.35 cents a gallon, below its early high of 39.70 cents. The contract opened at 39.00 cents, also its early low.
Gasoline's early rise was aided by draws in both the API and DOE report. The API said gasoline stocks dropped 745,000 barrels; the DOE, by 1.2 million barrels.
Implied demand for gasoline was estimated at around 8.1 million barrels, up slightly from the previos week. Despite the draw gasoline stocks are still very high at about 230 million barrels.
Meanwhile, traders said news that the Iran and Saudi Arabia stressed the need for production cuts and that they had called on non-OPEC producers to help raise prices was lending some support.
Also adding support is uncertainty over when Iraq can resume shipping crude from the Iraq-Turkey Pipeline disabled by U.S. bombing attacks earlier this week, tarders said.
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