CASPER
New member
Oil prices fade as U.S. crude inventory levels hit 16-year high
By Mark Williams, The Associated Press
COLUMBUS, Ohio - Oil prices faded Wednesday as a U.S. government report showed U.S. crude inventories rising to levels last seen in 1993.
Benchmark crude for May delivery fell US$1.21 to settle at $52.77 a barrel on the New York Mercantile Exchange, one day after closing at a high for the year.
In London, Brent prices shed $1.75 to settle at $51.75 on the ICE Futures exchange.
Crude in storage last week rose 3.3 million barrels, according to the U.S. Energy Information Administration, much more than what was expected by analysts.
It was another story at the pump, where prices continued their seasonal rise. National retail gasoline prices in the United States hit the highest level since Nov. 21 and are on pace to surpass $2 by Friday with one analyst suggesting prices may go as high as $2.25 this spring. The average gallon of regular gas has risen six cents this week.
Gasoline usually heads higher this time of year as refineries shut down for maintenance ahead of the summer driving season, but they've shut down earlier this time because Americans are driving a lot less.
Prices hit $1.986 Wednesday, according auto club AAA, Wright Express and Oil Price Information Service. Prices are 7.6 cents higher than a month ago, but $1.269 below year-ago levels.
In Canada, the price of gas averaged 89.1 cents Canadian per litre, according to price-watching website GasBuddy.com.
Oil prices rallied all last week and again on Monday amid gains in stock markets and optimism about a U.S. government plan to buy up toxic assets from banks. A weaker U.S. dollar has also caused investors to flee to commodities like oil.
Oil prices have risen about 30 per cent this month even as supplies continue to rise.
Oil tumbled as low as $51.86 early in the day as Japan reported February exports plunged an unprecedented 49.4 per cent. That would be the most severe decline since the world's second-largest economy began compiling comparable data in 1980.
That set the tone early before the government reported on U.S. crude stockpiles.
The EIA said that for the week ended Friday crude inventories rose to 356.6 million barrels, which is 15.6 per cent above year-ago levels. Stockpiles are now at their highest level since July 23, 1993.
Coupled with the 709.3 million barrels of oil in the U.S. strategic petroleum reserve, the United States has 1.05 billion barrels of oil in storage, noted oil analyst and trader Stephen Schork.
Despite weak demand and growing supplies, Schork said traders bought oil as soon as the government numbers were released.
"It's almost as if the market is talking itself into going higher," he said.
Analysts had expected a boost of 1.4 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
Gasoline inventories slipped by 1.1 million barrels, or 0.5 per cent, to 214.6 million barrels, 5.1 per cent below year-ago levels, according to the government report. Analysts expected stockpiles to fall by 900,000 barrels.
Demand for gasoline over the four weeks ended Friday was 0.7 per cent higher than a year earlier, averaging nearly 9.1 million barrels a day.
That while refineries ran slightly below what was expected by analysts.
Price increases for gasoline are typical around now, but Tom Kloza, publisher and chief oil analyst for OPIS, said prices will be no where like they were last summer when gasoline hit $4.11 a gallon. He said the weak economy and demand along with excess refining capacity should keep prices in check.
Oil did not get any help after the U.S. Commerce Department said durable goods orders increased 3.4 per cent last month, much better than the two per cent fall economists expected and after a record six straight declines. It was the first advance since July and the strongest one-month gain in 14 months.
The strength was led by a surge in orders for military aircraft and parts, but demand for machinery, computers and fabricated metal products also rose.
Still, the rebound was expected to be temporary given all the problems facing the economy, and a large drop in orders in January was revised even lower.
That agency also said new home sales rebounded unexpectedly last month, but were still the second-worst on record and remained well below last year's levels.
Sales rose 4.7 per cent in February to a seasonally adjusted annual rate of 337,000 from an upwardly revised January figure of 322,000. Even after the revision to January's sales results, the month remained the worst on records dating back to 1963.
Economists surveyed by Thomson Reuters had expected February sales to fall to a pace of 300,000 units.
Sales were down more than 40 per cent from February 2008.
In other Nymex trading, gasoline for April delivery fell three-quarters of a cent to settle at $1.495 a gallon, while heating oil lost 3.5 cents to settle at $1.4647 a gallon. Natural gas for April delivery fell 1.8 cents to settle at $4.295 per 1,000 cubic feet.
-
Associated Press writers Alan Zibel, Martin Crutsinger in Washington, Pablo Gorondi in Budapest, Hungary, and Eileen Ng in Kuala Lumpur, Malaysia, contributed to this report.
By Mark Williams, The Associated Press
COLUMBUS, Ohio - Oil prices faded Wednesday as a U.S. government report showed U.S. crude inventories rising to levels last seen in 1993.
Benchmark crude for May delivery fell US$1.21 to settle at $52.77 a barrel on the New York Mercantile Exchange, one day after closing at a high for the year.
In London, Brent prices shed $1.75 to settle at $51.75 on the ICE Futures exchange.
Crude in storage last week rose 3.3 million barrels, according to the U.S. Energy Information Administration, much more than what was expected by analysts.
It was another story at the pump, where prices continued their seasonal rise. National retail gasoline prices in the United States hit the highest level since Nov. 21 and are on pace to surpass $2 by Friday with one analyst suggesting prices may go as high as $2.25 this spring. The average gallon of regular gas has risen six cents this week.
Gasoline usually heads higher this time of year as refineries shut down for maintenance ahead of the summer driving season, but they've shut down earlier this time because Americans are driving a lot less.
Prices hit $1.986 Wednesday, according auto club AAA, Wright Express and Oil Price Information Service. Prices are 7.6 cents higher than a month ago, but $1.269 below year-ago levels.
In Canada, the price of gas averaged 89.1 cents Canadian per litre, according to price-watching website GasBuddy.com.
Oil prices rallied all last week and again on Monday amid gains in stock markets and optimism about a U.S. government plan to buy up toxic assets from banks. A weaker U.S. dollar has also caused investors to flee to commodities like oil.
Oil prices have risen about 30 per cent this month even as supplies continue to rise.
Oil tumbled as low as $51.86 early in the day as Japan reported February exports plunged an unprecedented 49.4 per cent. That would be the most severe decline since the world's second-largest economy began compiling comparable data in 1980.
That set the tone early before the government reported on U.S. crude stockpiles.
The EIA said that for the week ended Friday crude inventories rose to 356.6 million barrels, which is 15.6 per cent above year-ago levels. Stockpiles are now at their highest level since July 23, 1993.
Coupled with the 709.3 million barrels of oil in the U.S. strategic petroleum reserve, the United States has 1.05 billion barrels of oil in storage, noted oil analyst and trader Stephen Schork.
Despite weak demand and growing supplies, Schork said traders bought oil as soon as the government numbers were released.
"It's almost as if the market is talking itself into going higher," he said.
Analysts had expected a boost of 1.4 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
Gasoline inventories slipped by 1.1 million barrels, or 0.5 per cent, to 214.6 million barrels, 5.1 per cent below year-ago levels, according to the government report. Analysts expected stockpiles to fall by 900,000 barrels.
Demand for gasoline over the four weeks ended Friday was 0.7 per cent higher than a year earlier, averaging nearly 9.1 million barrels a day.
That while refineries ran slightly below what was expected by analysts.
Price increases for gasoline are typical around now, but Tom Kloza, publisher and chief oil analyst for OPIS, said prices will be no where like they were last summer when gasoline hit $4.11 a gallon. He said the weak economy and demand along with excess refining capacity should keep prices in check.
Oil did not get any help after the U.S. Commerce Department said durable goods orders increased 3.4 per cent last month, much better than the two per cent fall economists expected and after a record six straight declines. It was the first advance since July and the strongest one-month gain in 14 months.
The strength was led by a surge in orders for military aircraft and parts, but demand for machinery, computers and fabricated metal products also rose.
Still, the rebound was expected to be temporary given all the problems facing the economy, and a large drop in orders in January was revised even lower.
That agency also said new home sales rebounded unexpectedly last month, but were still the second-worst on record and remained well below last year's levels.
Sales rose 4.7 per cent in February to a seasonally adjusted annual rate of 337,000 from an upwardly revised January figure of 322,000. Even after the revision to January's sales results, the month remained the worst on records dating back to 1963.
Economists surveyed by Thomson Reuters had expected February sales to fall to a pace of 300,000 units.
Sales were down more than 40 per cent from February 2008.
In other Nymex trading, gasoline for April delivery fell three-quarters of a cent to settle at $1.495 a gallon, while heating oil lost 3.5 cents to settle at $1.4647 a gallon. Natural gas for April delivery fell 1.8 cents to settle at $4.295 per 1,000 cubic feet.
-
Associated Press writers Alan Zibel, Martin Crutsinger in Washington, Pablo Gorondi in Budapest, Hungary, and Eileen Ng in Kuala Lumpur, Malaysia, contributed to this report.
