DJ OIL FUTURES: Nymex Crude Up On Surprise Inventory Draw
12/06/2006
Dow Jones News Services
(Copyright © 2006 Dow Jones & Company, Inc.)
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(MORE TO FOLLOW) Dow Jones Newswires
12-06-06 1035ET
Copyright (c) 2006 Dow Jones & Company, Inc.
DJ OIL FUTURES: Nymex Crude Slips After Brief Rally On Data
By Masood Farivar
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Crude oil futures were modestly lower Wednesday morning after rising in initial reaction to a surprise across the board drawdown in U.S. petroleum stocks.
Commercial crude stocks fell 1.1 million barrels to 339.7 million barrels last week as refinery utilization jumped 2.4 percentage points to 90.5% of operating capacity, the highest level since late September.
Analysts surveyed by Dow Jones Newswires had predicted an average build of 560,000 barrels, although some analysts had expected a drawdown.
Petroleum product stocks fell despite an increase in production, indicating strong demand.
Distillate stocks, which include heating oil and diesel fuel, declined 400,000 barrels to 132.4 million barrels, while gasoline stocks fell 1.1 million barrels to 200 million barrels.
Analysts had predicted a build of 140,000 barrels in gasoline stocks and a draw of 860,000 barrels in distillate stocks.
"You have to a be a little disappointed because supplies didn't build with the runs going up," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. "One of the reasons the market is down is that people think the combination of increased refinery runs and mild temperatures may help supplies down the road."
The January crude contract on the New York Mercantile Exchange fell 49 cents to $61.94 a barrel after rising as high as $62.86 a barrel.
The January Brent contract on ICE Futures was 31 cents lower at $63.01 a barrel.
January RBOB gasoline was down 2.64 cents at $1.6175 a gallon. January unleaded gasoline slipped 1.24 cents to $1.6240 a gallon. January heating oil was 2.03 cents lower at $1.7780 a gallon.
Temperatures in the Northeast, the nation's largest heating oil market, are expected to moderate, with the National Weather Service forecasting above normal temperatures through most of the nation next week.
The jump in refinery utilization, while it cut into crude stocks, was the most bearish aspect of the report, Flynn said.
"It means supplies of petroleum products will likely increase to meet demand," he said.
-By Masood Farivar, Dow Jones Newswires; 201-938-2094; masood.farivar@dowjones.com
(END) Dow Jones Newswires
12-06-06 1104ET
Copyright (c) 2006 Dow Jones & Company, Inc.
DJ OIL FUTURES: Nymex Crude Slips Despite Inventory Draw
By Masood Farivar
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Crude oil futures slipped Wednesday as traders shrugged off a modest decline in U.S. petroleum inventories.
The federal Energy Information Administration reported that U.S. crude stocks fell by 1.1 million barrels last week, while gasoline inventories declined by the same amount and distillate stocks, which include heating oil and diesel fuel, slipped 400,000 barrels.
Analysts surveyed by Dow Jones Newswires had predicted a build of less than 1 million barrels in both gasoline and crude stocks and a modest drawdown in distillate stocks.
"It was not enough of a surprise to warrant a substantial move in either direction," said Edward Meir, an analyst at brokerage Man Financial in New York. "The increase in refinery runs was a bit bearish because it could mean that more product builds are on coming on line down the road."
Trading was choppy.
The January crude contract on the New York Mercantile Exchange ended down 19 cents at $62.24 a barrel after trading in a range of $61.84-$63.01 a barrel.
January RBOB gasoline lost 1.39 cents to $1.6300 a gallon. January unleaded gasoline slipped 1.52 cents to $1.6212 a gallon. January heating oil was 8 points lower lower at $1.7975 a gallon.
Final settlement prices weren't in.
The draw in crude stocks came as refinery utilization jumped by 2.4 percentage points to 90.5% of operating capacity.
Phil Flynn, an analyst at Alaron Trading Corp. in Chicago, said the increase in runs was the most bearish aspect of the report.
"You have to a be a little disappointed because supplies didn't build with the runs going up," Flynn said. "One of the reasons the market is down is that people think the combination of increased refinery runs and mild temperatures may help supplies down the road."
Temperatures in the Northeast, the nation's largest heating oil market, were expected to moderate later in the week, with the National Weather Service forecasting above normal temperatures through most of the nation next week.
The pullback in prices came ahead of meeting next week of oil ministers from the Organization of Petroleum Exporting Countries.
Meir said that uncertainty ahead of the meeting will likely keep prices from falling further.
"I think prices are going to probably stabilize until the meeting because people are still confused about what the cartel is going to do," he said.
OPEC officials have been pressing in recent days for a cut in output on top of a production cut of 1.2 million barrels a day approved in October.
But Meir said that an output cut is not a foregone conclusion.
"Keep in mind that things can change between now and next week," he said. "If we rally to $64.00 a barrel, they may not cut. If we drop below $60.00 they may cut."
--By Masood Farivar, Dow Jones Newswires; 201-938-2094; masood.farivar@dowjones.com
(END) Dow Jones Newswires
12-06-06 1509ET
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