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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Jon Cave who wrote (73304)	9/13/2000 12:19:10 PM
From: Jon Cave	Read Replies (2) \| Respond to of 95453

Crude, Gasoline Test Upside On Stock Draws NEW YORK (Dow Jones)--Crude and gasoline futures rebounded in morning trading Wednesday at the New York Mercantile Exchange as market players turned attention to generally supportive inventory data after correcting for an output increase. However, new headlines sent futures back into negative territory, but analysts expected the drop to be brief, they said at midday. A report that Organization of Petroleum Exporting Countries President Ali Rodriguez said that member countries could increase output by 2 million barrels a day "if necessary" sent futures prices lower. Traders are also monitoring bearish reports that the Clinton Administration could release crude oil from the Strategic Petroleum Reserve to help lower high prices and meet winter fuel demand. Congressional sources said Wednesday that the Clinton Administration is more seriously considering tapping the Strategic Petroleum Reserve as prices remain high despite Sunday's announcement of higher production from the Organization of Petroleum Exporting Countries. Northeastern senators have been calling for the release of crude from the SPR for the past year. They believe the SPR needs to be tapped now in order to meet winter heating fuel demand. "It's now or never," said a Senate staffer, noting it can take two months to get crude out of the ground, refined and transported to consumers. That bearish announcement could shave more than $5 off crude prices, some analysts predicted. Absent a definitive SPR release, the market is increasingly focusing on reports by the American Petroleum Institute and the Department of Energy reports, which showed an unexpected draw in crude stocks but a healthy build in distillate stocks. Crude stocks dropped 1.937 million barrels to 288.615 million barrels, according to the API data. The DOE showed a smaller draw of just 1.00 million barrels to 288.5 million barrels. Analysts were expecting a 2 million-barrel build. Gasoline stocks fell by a larger than expected amount. According to the API, gasoline stocks dropped 5.894 million barrels to 195.927 million barrels as demand for the product rose unexpectedly to 9.182 million barrels a day. However, part of the reason for the huge drawdown was a upward revision of last week's gasoline inventory data. The DOE reported a 3.7 million barrel draw in U.S. gasoline stocks to 191.8 million barrels. Distillate stocks, which include heating oil and diesel fuel, rose by slightly more than expected. According to the API, distillate stocks grew 2.128 million barrels to 115.008 million barrels, with the bulk of the build concentrated in the critical east coast market. The DOE showed an even larger stock build of 2.3 million barrels to 114.6 million barrels. Although the distillate inventory build is a neutral to bearish sign, distillate stocks remain about 20% below last year's levels, prompting fears of a heating oil shortage this winter. High natural gas prices are lending support. Market volatility is expected to continue as the complex digests a pledge by the Organization of Petroleum Exporting Countries to raise crude output quotas by 800,000 barrels a day from Oct 1. The production increase is viewed as insufficient, but there is a perception that the prices may stall around their current levels without further fundamental support. At 12:01 p.m. EDT (1601 GMT), October crude oil futures had fallen 11 cents to $34.17 a barrel, while October heating oil had fallen 2.43 cents to $102.30 a gallon and October gasoline had dropped 45 points to 93.45 cents a gallon.