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[Bullwinkle]

RPT - Crude futures close at one-week low on lofty supplies
Friday, February 24, 2006 1:04:12 AM
http://www.afxpress.com


SAN FRANCISCO (AFX) - Crude-oil futures fell Thursday, closing at the lowest level in a week as US inventories of oil, gasoline and distillates remained well above their year-ago levels

"The ample supply of stocks for all energy products should continue to place downward pressure on prices in the near term," said Rakesh Shankar, an economist at Moody's Economy.com

Crude for April delivery lost 47 cents to close at 60.54 usd a barrel on the New York Mercantile Exchange after falling as low as 59.70 usd. Prices haven't traded at levels this low since Feb 16. The contract closed almost 3 pct lower on Wednesday. Earlier Thursday, the Energy Department reported a 1.1 mln-barrel increase in crude supplies for the week ended Feb 17. That figure met with general market expectations. Stocks had climbed 4.9 mln the previous week

The latest tally stands at 326.7 mln -- 9.9 pct above the year-ago level, the government said

In contrast, the American Petroleum Institute said supplies of the energy commodity actually fell 1.4 mln barrels to 327.5 mln

Motor gasoline supplies rose 100,000 barrels last week to 225.6 mln -- 0.9 pct above the year-ago level, the Energy Department said. It was the fuel's eighth-straight week of climbing inventories. Most analysts had expected a climb of around 1 mln

The API, however, reported a 1.9 mln-barrel decline in the stocks to total 217.8 mln

Against this backdrop, March unleaded gasoline climbed 3.89 cents to finish at 1.5134 usd a gallon. March heating oil rose 1.05 cents to close at 1.6626 usd a gallon

Distillate supplies, which include heating oil, also fell by 1.9 mln barrels, the API said, to total 135.5 mln. The Energy Department pegged the tally at 135.6 mln, down 1.3 mln from the previous week

Inventories of the crude product now stand at more than 14 pct above their year-ago level, according to the government report

The mixed data on the petroleum supplies follow an increase in refinery capacity utilization to 86.6 pct last week from 86.1 pct the previous week, according to the Energy Department

"After a relatively swift recovering following the devastating hurricanes late last year, refinery utilization moderated sharply since the beginning of this year, and is yet to meaningfully recover," said Shankar, in a weekly report

He blamed the recovery slowdown on a "combination of regular maintenance shutdown, as well as reduced runs at Gulf Coast refiners still recovering from the hurricanes." And the reduced domestic refining capacity increases the nation's reliance on gasoline and distillate product imports, he said

Crude imports were down 305,000 barrels per day, to average almost 10 mln barrels per day last week, the government data showed, with motor gasoline imports averaging 1.2 mln barrels per day and distillate fuel imports averaging 494,000 barrels per day

Total products supplied over the last four-week period averaged over 20.5 mln barrels per day, down 0.3 pct from the same period a year ago, the government report said

Also for the last four-week period, motor gasoline demand averaged 9 mln barrels per day. That's 2.3 pct above the same time a year ago. Distillate fuel demand averaged 4.2 mln, up 0.7 pct from a year earlier

The rise in gasoline demand may have been driven, in part, by a sharp drop in unleaded-gasoline prices for the week of Feb 17, said Shankar

But "gasoline prices are expected to remain volatile in the near term, thanks to healthy demand growth, new EPA regulations, and reduced domestic production that increases reliance in imports," he said

The natural gas market was also digesting data from the Energy Department Thursday that showed a decline in supplies of the energy commodity that was slightly bigger than some market estimates, but total supplies remain well above average. March natural gas fell to a low of 6.98 usd per million British thermal units, but recovered to close at 7.458 usd, up 17.5 cents, or 2.4 pct

US natural-gas stocks fell by 123 billion cubic feet for the week ended Feb 17, the Energy Department reported Thursday. At the same time last year, supplies saw a 104 bln-cubic-foot decline, according to Ben Weagraff, an economist at Moody's Economy.com. Analysts surveyed by Platts expected a decline of 118 bln. Global Insight was looking for a fall of 104 bln. Total stocks now stand at 2.143 trln cubic feet, up 410 bln cubic feet from the year-ago level, and up 694 bln cubic feet from the five-year average, the government data said

"With stocks at 47.9 pct above the five-year average, any upward momentum on futures prices is expected to be modest," said Weagraff. In energy equities Thursday, benchmarks tracking the oil and gas sectors were mixed, with the Oil Service Index posting modest gains. Meanwhile, gold futures lost 1 pct to close at a one-week low Thursday. Taking a broad measure of the commodity-futures markets, the Reuters/Jefferies CRB Index was down 0.7 pct at 323.9 points on the New York Board of Trade

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=1140743035-f05e0f08-00869