Finance & Investing
News Services
Newsletters
Get free industry updates via email.
Daily News
Weekly News
Equipment Updates
Weekly Job Register
Monthly Event Guide
Our privacy
pledge.


advertisement

Crude-Oil Futures Settle Lower After Rise in Inventories

change text size

Crude-oil futures settled slightly lower Wednesday after a larger-than-expected rise in U.S. inventories stirred concerns about demand.

The federal Energy Information Administration said crude-oil stocks climbed 3.8 million barrels to 381.4 million barrels in the week ended March 1, well above the 500,000-barrel increase analysts expected. The stocks are at the highest level for this time of year in 82 years, as domestic production increased and demand from refiners eased during a period of seasonal maintenance.

"It's the same general theme we've been seeing: crude is plentiful, products are a little tight," said Kyle Cooper, managing partner at IAF Advisors.

The EIA data showed domestic crude production neared 7.1 million barrels a day, or 1.3 million barrels above the same week in 2012.

Refiners cut crude-oil processing by nearly 500,000 barrels a day to the lowest levels in almost two years. At current reduced processing rates of just above 14 million barrels a day, stocks are sufficient to meet nearly four weeks of refiner demand, the highest level in almost 20 years.

Mr. Cooper said seasonal refinery maintenance appears to be running longer than had been expected, and some companies are suffering unplanned outages at units, reducing supply of refined products like gasoline.

Light, sweet crude-oil futures for April delivery on the New York Mercantile Exchange settled 39 cents, or 0.4%, lower at $90.43 a barrel. The contract hit a low of $89.55 a barrel after the EIA data but recovered some losses after failing to break below the 2012 intraday low of $89.33 the front-month contract touched Monday.

Gene McGillian, broker and analyst at Tradition Energy, said he expects prices to consolidate around $90 for the near term, as traders look for clues on the pace of economic recovery and oil demand. U.S. oil use dropped 2.1% to a one-month low last week, EIA data showed.

"We've wiped out $8 from the price and if we continue to see slowing in economies in the U.S. and Europe, prices could go down to the mid-$80s," a level last seen in mid-November, he said.

ICE North Sea Brent for April delivery settled 55 cents, or 0.5%, lower at $111.06 a barrel.

The EIA said U.S. crude-oil imports last week fell by 650,000 barrels a day to 7.3 million barrels a day. Higher domestic flows from shale-oil fields are expected to continue the trend of reducing the need for crude-oil imports.

Gasoline output fell 600,000 barrels a day last week, to a seven-week low, cutting nationwide inventories in the week.

But stocks in Northeast U.S., including the New York Harbor delivery point for the benchmark gasoline futures contract, climbed for an 11th-straight week, as regional supplies continued to recover from effect of Hurricane Sandy. Stocks are 2.6% above year-earlier levels in the region, reversing a mid-December year-on-year fall of 2.5%.

April-delivery reformulated gasoline blendstock futures settled 2.35 cents, or 0.7%, lower at $3.1247 a gallon.

The EIA reported inventories of distillate fuel (diesel/heating oil) fell by a steep 3.83 million barrels, more than five times larger than expectations of a decline of 700,000 barrels. April heating oil gained 0.26 cent, or 0.1%, to settle at a one-week high of $2.9756 a gallon.

Copyright (c) 2012 Dow Jones & Company, Inc.

WHAT DO YOU THINK?

Post a Comment Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.


Most Popular Articles
From the Career Center
Jobs that may interest you
Sales Representative II - Cementing Products
Expertise: Sales and Marketing, Technical Sales
Location: Canonsburg, PA
 
Corporate Sales Representative
Expertise: Sales and Marketing
Location: Denver, Colorado, United States, 80202 , CO
 
Sales Engineer/Business Development
Expertise: Coil Tubing, Sales and Marketing, Well Servicing & Testing
Location: Anchorage, AK
 
search for more jobs