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Oil prices jump on weak US gasoline stockpiles
AFP
NEW YORK
Petroleumworld.com 06 28 07Crude oil prices rebounded strongly on Wednesday, reversing earlier losses after a weekly survey revealed a surprise decline in stockpiles of motor fuel in the United States, traders said.
Gasoline or petrol reserves are currently in focus amid the US summer driving season when demand typically peaks as many Americans take to the roads for their annual vacations.
New York's main oil futures contract, light sweet crude for delivery in August, soared 1.20 dollars to close up at 68.97 dollars per barrel.
Across the Atlantic in London, Brent North Sea crude for August delivery added 36 cents to 70.53 dollars per barrel.
Prices spiked after the US Department of Energy reported that American petrol stockpiles fell by 700,000 barrels to 202.6 million barrels in the week ending June 22.
That surprised the market because analysts had forecast a large gain of 1.0 million barrels.
Gasoline reserves are now running well below the lower end of the average range for this time of year, the DoE added in its weekly market update.
"The draws in the products (such as gasoline and distillates) are bullish," said Citigroup analyst Tim Evans.
US reserves of distillates, which include diesel and heating oils, sank by 2.3 million barrels. That confounded expectations for a gain of 500,000 barrels.
The DoE added that American crude oil inventories rose 1.6 million barrels last week to 350.9 million barrels, ahead of analysts' consensus forecasts for an increase of 1.5 million.
Prices have also been supported by concerns about refinery utilisation as outages across the United States have created supply problems in the gasoline production process.
The DoE said refinery utilization rebounded last week by 1.8 percentage points to 89.4 percent, compared with the previous week.
Earlier Wednesday, oil prices had fallen as traders priced in predicted gains to US gasoline stocks -- which failed to ultimately materialise.
Crude futures had closed down more than a dollar on Tuesday, owing to expectations of higher inventories and as output increased from key producer Nigeria.Prices were dampened by news that US energy giant Chevron had resumed operations at its facility in southern Nigeria that was shut down two weeks ago because of community unrest.
AFP 27 1936 GMT 06 07
Copyright© 2007 AFP. All Rights Reserved.
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