Energy bulls coming out to play a little.
Refiners up 1% in early morning trading.
OIH up 0.6%.
XLE up 0.7%.
$VIX 13.83 and in a descending channel.
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U.S. Report Shows Decline in Gasoline Stockpiles
LONDON (AP) -- Oil prices bounced up and down in a narrow range Thursday after a U.S. government report showed domestic crude and gasoline stockpiles were lower than analysts had forecast.
"We may have seen the extent of the recent dip," said Peter Beutel, an analyst at Cameron Hanover. "Prices did not seem ready overnight to break above resistance, but the bulls will be given a chance to do just that today during the regular session."
Light, sweet crude for April delivery fell 8 cents to US$61.74 a barrel in electronic trading on the New York Mercantile exchange at midday in Europe, after climbing to the plus side earlier in the session. The contract gained more than US$1 the previous day to settle at US$61.82 per barrel.
Brent crude for April delivery fell 22 cents to $62.28 a barrel on London's ICE Futures Exchange.
Heating oil futures fell a quarter of a cent to US$1.7650 a gallon while natural gas prices rose marginally to US$7.371 per 1,000 cubic feet.
Crude prices climbed as high as US$62.10 earlier Wednesday following the U.S. Energy Information Administration's report that crude oil stockpiles dropped by 4.8 million barrels last week to 324.2 million barrels. Crude inventories are still above average for this time of year, but the decline surprised analysts, who had been expecting a rise of 2 million barrels, according to a Dow Jones Newswires survey.
Part of the fall was due to delays at the Houston Ship Channel, which helped limit overall imports to an average of 8.9 million barrels daily last week, the U.S. government said, down by 650,000 barrels daily from the prior week.
Total U.S. motor gasoline inventories fell by 3.8 million barrels to 216.4 million barrels, a sharper decline than the 1.4 million barrel drop that analysts had expected. The government said refineries operated at 85.8 percent of capacity during the week, down from 86 percent the prior week.
Distillate fuel inventories, which include diesel and heating oil, fell by 1.3 million barrels to 123.2 million, the EIA reported. Analysts had expected a 2.3 million barrel decline.
"While oil supplies plunged 4.85 million barrels and gasoline dropped 3.75 million barrels, both are still well above their five-year averages," said Jim Rintoul of TheOiltrader.com. "Continued OPEC cuts notwithstanding, oil stocks are likely to move higher after the heating season comes to an end, keeping prices subdued."
Markets are also watching developments in the Middle East over Iran's over failure to comply with demands to halt its uranium enrichment program. Washington is pushing for tougher U.N. sanctions on Tehran and introducing legislation to squeeze Iran by punishing foreign oil companies that invest in its energy industry, the heart of Iran's economy.
