Shrugging off a build in crude oil and gasoline stocks spotlighted by the EIA today, optimistic investors abandoned the dollar's safe havens to open wallets for both oil and gasoline commodities amid rallying equities on Wall Street.
Despite a larger-than-anticipated build in crude stocks by more than 4 million barrels last week, the price of light, sweet crude oil for April delivery soared to an intra-day high above $81, but ultimately drew back slightly to a final price tag of $80.87 a barrel.
Additionally, gasoline inventories were up by 700,000 barrels, or 100,000 barrels more than the API's forecast; however, NYMEX gasoline futures traded even higher to $2.25 a gallon at the close of the session.
Positive data indicating that private employers shed fewer jobs in February, as well as an announcement from the Institute for Supply Management highlighting the fastest growth in the U.S. services sector in more than two years, helped boost economic optimism in the broader financial market.
Some analysts have also noted the market's shifting focus toward the upcoming driving season and the expectation for increased fuel demand in the near future.
"You can't attribute the whole rally today to expectations that gasoline demand will increase as we head into the next few months," contended Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
McGillian pointed to the better-than-expected ISM manufacturing number for February, Wall Street's good economic cheer and a weaker greenback as the impetuses for today's drive up in energy prices.
The analyst explained, "I think the market is getting a lot of spillover from the same factors that have helped oil rally in the last half year -- primarily when the dollar slides and equities rally -- which is what outweighed the market's usual fixation on inventory reports for the day."
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