Crude oil futures higher on surprise drop in U.S. crude stocks
David Bird, Dow Jones Newswires
NEW YORK--Crude-oil futures prices were higher at mid-morning Wednesday after U.S. inventory data showed an unexpected drop in the nationwide crude-oil stockpile.
Data from the Energy Information Administration showed crude oil stocks fell by 951,000 bbl in the week ended Jan. 11, while forecasters called for a sizeable rise. A drop of more than 300,000 bbl a day in crude oil imports contributed to the decline in the week, the EIA data show.
Analysts surveyed by Dow Jones Newswires had called for a 2.1-million-bbl rise in crude inventories. The EIA data show crude oil stocks in the key Gulf Coast refining region, where much of U.S. imports arrive, fell by 3.8 million bbl in the week, with gains in other areas offsetting some of the decline.
Light, sweet crude oil for February delivery on the New York Mercantile Exchange was 93 cents higher, at $94.21/bbl. Prices were up by about 25 cents ahead of the data release. ICE North Sea Brent crude oil for February, ahead of its expiration at the settlement, was 21 cents higher, at $110.51/bbl. March Brent was 29 cents higher, at $109.92/bbl.
Andrew Lebow, senior vice president of energy futures at Jefferies Bache in New York, said he thought the price gain after the data was overdone. "I thought the numbers were pretty lackluster, but if we can close at these prices, it will be bullish." Despite the gain, to an intraday high of $94.36/bbl, crude remained below recent intraday highs. Crude hasn't settled above $94.14/bbl since mid-September 2012.
Crude oil inventories at Cushing, Okla. rose 1.78 million bbl to a record high 51.862 million bbl last week, the EIA said. Analysts said high stocks are keeping Nymex crude prices in check, but they expect inventories will begin to drain as more crude oil flows to the Gulf region after a pipeline expansion that opened in recent days.
Gasoline inventories climbed for an eighth straight week and stand at the highest level for this time of year on EIA data beginning in 1990. Stocks are highest in any week in nearly two years, since February 2011.
But gasoline prices rose on the news because the increase of 1.91 million bbl was less than expectations and less than half the size of a 4.1 million-bbl rise reported by the American Petroleum Institute, a trade group, in its inventory report released late Tuesday afternoon. Gasoline stocks have gained 34.6 million bbl, or 17.3%, in the past eight weeks. But the modest rise last week reduced the size of the surplus to the year-ago and five-year-average levels.
The EIA also said distillate stocks (diesel/heating oil) rose by 1.686 million bbl, which was slightly more than expected, but heating oil prices added to earlier gains on forecasts for colder-than-normal temperatures through the end of January in the key Northeast U.S. market.
February reformulated gasoline blendstock futures were 2.13 cents higher, at $2.7279 a gallon, while heating oil was up 1.96 cents at $3.0309 a gallon.