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Crude Oil Pares Gains on Inventory Report
NEW YORK (TheStreet) -- Crude oil prices pared earlier gains after the Energy Department reported a smaller drop in inventories than the industry had projected.
The Energy Information Administration said crude oil stockpiles declined by 0.4 million barrels in the week ended Oct.8. That was more bullish than the 1.5 million barrel build-up projected by the Platts survey of analysts. Still, the drop was lower than the 4 million barrel decrease reported by the American Petroleum Institute.
Crude oil futures for November delivery was up 27 cents to $83.28 in forenoon trading, after rising as high as $84.12.
Earlier on Thursday, Opec president Wilson Pastor said that oil at $75 to $85 a barrel is not a problem for the world economy and that the members of the organization would keep production unchanged, Bloomberg reported.
Crude prices received a boost on Wednesday, after the International Energy Agency raised its global demand outlook for 2011. The U.S. Energy Department also raised its outlook and forecast prices at $83 a barrel for 2011.
The Energy Department also reported a 1.8 million decrease in gasoline inventories, slightly higher than the 1.5 million draw down projected by Platts. Meanwhile, distillates shed 0.3 million barrels, much smaller than the 1.6 million draw projected by analysts.
Meanwhile, natural gas storage levels gained 91 billion cubic feet in the week ended Oct. 8. The addition was at the high end of the projected injection range of 89 billion to 93 billion cubic feet that had been estimated by analysts polled by Platts.
Natural gas futures were rising by 2 cents to $3.717 per BTU. Heating oil futures were flat at $2.298 per barrel while November gasoline futures were losing 2 cents to $2.145 a barrel.
Energy stocks were higher on Thursday, with the NYSE Arca Oil Index rising 0.2% while the Oil Service Sector Index rose 0.4%. Energy stocks were trading mixed with Dow components Exxon Mobil(XOM_) and Chevron(CVX_) slightly lower. Total(TOT_) was a prominent gainer, up 1.2%, while PetroBras(PBR_) and Royal Dutch Shell(RDS.A_) also edged higher.
The United States Oil Fund(USO_) was up 0.1% at $36.20 while United States Natural Gas(UNG_) rose 1.3% on the report.
