U.S. Oil Prices Retreat After Inventory Data
October 07 2015 - 11:44AM
Dow Jones News
By Nicole Friedman
NEW YORK--U.S. oil prices pared gains but continued to trade
higher Wednesday after weekly inventory data showed U.S. stockpiles
of crude oil and petroleum products at a new record high.
Crude-oil stockpiles increased by 3.1 million barrels to 461
million barrels, marking a second week of increases, the U.S.
Energy Information Administration said. Analysts surveyed by The
Wall Street Journal had predicted supplies would rise by 2.5
million barrels on the week.
Gasoline supplies also rose, but stockpiles of distillates,
including heating oil and diesel fuel, fell.
Total supplies of crude oil and petroleum products rose by 2.3
million barrels to 1.3 billion barrels, a record in EIA data going
back to 1990.
Oil prices traded in a narrow range in September as investors
assessed how long the global glut of crude oil--which sent prices
plunging in the past year--would persist. While production has
started falling in the U.S., supporting prices, robust output from
other areas and ongoing concerns about consumption kept prices
subdued last month.
In addition, traders were cautious about piling into the market
because oil demand typically declines at this time of year as
refineries perform seasonal maintenance.
Refineries ran at 87.5% of capacity last week, compared with
89.8% of capacity the prior week, the EIA said. Refinery
maintenance was especially heavy in the Midwest, leading to an
unexpected increase in crude-oil supplies in the key storage hub of
Cushing, Okla.
Lower refinery demand in the Midwest also pushed more crude into
storage facilities along the Gulf Coast.
"The crude-oil market has to be concerned as they continue to
see these very large week-on-week Gulf Coast crude-oil inventory
builds, because it's certainly not sustainable through the end of
the year," said Andy Lipow, president of Lipow Oil Associates in
Houston.
Light, sweet crude for November delivery recently rose 24 cents,
or 0.5%, to $48.77 a barrel on the New York Mercantile Exchange,
after briefly turning negative following the EIA data release.
Brent, the global benchmark, traded up 43 cents, or 0.8%, at $52.35
a barrel on ICE Futures Europe.
Brent rose above $50 a barrel on Tuesday for the first time in
about a month, after the U.S. Energy Information Administration
lowered its U.S. oil-production forecasts for 2015 and 2016, while
raising its global demand forecasts for the same period.
The U.S. benchmark neared the psychologically important level as
well but pared its gains after the EIA data.
"Since August, with very few exceptions...the price stood under
$50, so it is very significant," said Eugen Weinberg, head of
commodities research at Commerzbank. "Some investors, who are
waiting at the moment on the sidelines, might pour their money back
into oil and commodities markets."
Gasoline futures recently fell 1.3% to $1.4174 a gallon. Diesel
futures fell 0.1% to $1.6094 a gallon.
Ese Erheriene contributed to this article.
Write to Nicole Friedman at nicole.friedman@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 07, 2015 11:29 ET (15:29 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.