Crude-Oil Futures Edge Higher After Inventory Report
Crude-oil futures ended a turbulent session little changed, after a report showed an unexpected drop in U.S. oil stockpiles but also pointed to sliding gasoline demand.
Oil stockpiles in the world's biggest consumer fell 600,000 barrels last week, the Energy Information Administration said, bucking expectations for no change. But gasoline demand slumped to a two-month low and fuel-product inventories rose sharply.
Light, sweet crude for June settled 9 cents, or 0.1%, higher at $94.30 a barrel on the New York Mercantile Exchange. The contract fell as much as 2.3%, to $92.13 a barrel intraday following the EIA's weekly report, but spent the afternoon recovering those losses.
Brent crude on the ICE futures exchange rose $1.08, or 1.1%, to $103.68 a barrel.
"It was aggressively sold and now it's just unwinding," said Ray Carbone, president of Paramount Options, an oil options brokerage in New York. "It's a nervous market."
Wednesday's gain halted a four-session losing streak for crude-oil futures, which have been pulled lower on concerns about weakening demand and robust supplies in the U.S. and elsewhere.
There was little to ease those concerns in the EIA's data. The agency said gasoline demand dropped by 1.2% on the week to a two-month low of 8.341 million barrels a day.
As demand slid, gasoline output rose to the highest level since late December, pumping up inventories by 2.588 million barrels in the week, compared with an expected 700,000-barrel drop.
The EIA also said crude oil stocks fell by 624,000 barrels, against a forecast for them to be unchanged in the week. Stocks stand at 394.9 million barrels, just shy of the highest levels in EIA monthly data since April 1981. Stock levels have recently surpassed levels on EIA weekly reports, which began in August 1982.
Refiners increased operations by 1 percentage point--or twice the expected level--but the higher operations didn't greatly dent the level of crude oil stocks. At 88% of capacity, refiners posted the highest utilization level since Jan. 4.
EIA also reported distillate stocks rose by 2.3 million barrels, far more than the expected 700,000-barrel rise.
Prices were off 1.5% ahead of the report and have fallen 2.5% over four sessions heading into Wednesday on concerns of slowing demand and high inventory.
Front-month June reformulated gasoline blendstock, or RBOB, settled 2.94 cents, or 1%, higher at $2.8670 a gallon. June heating oil, which trades as a proxy for diesel, settled 0.71 cent, or 0.3%, higher at $2.8801 a gallon.
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