Commodity Corner: Oil Settles Above $101

July crude oil gained $1.73 Wednesday to settle at $101.32.

The midweek rally occurred as the U.S. Energy Information Administration reported an unexpected increase in oil stocks and evidence that refiners are processing greater volumes of crude. In the former case, EIA announced that crude oil inventories have risen 600,000 barrels since last week to a total of 370.9 million barrels. Analysts polled by Platts had expected a 1.6 million-barrel decline in oil stocks.

EIA figures also showed a 1.4-percent week-on-week drop in total distillate stocks, with a May 20, 2011, figure of 141.1 million barrels. During the same period last year, distillate stocks stood at 152.5 million barrels. Last week's distillate stocks decline, coupled with a 502,000-barrel-per-day increase in refinery inputs (to 14.841 million b/d) week-on-week, indicate stronger demand for crude.

July crude oil traded within a range from $98.20 to $101.54 Wednesday.

Natural gas for June delivery gained three cents to $4.38 per thousand cubic feet as the eastern half of the U.S. faces more summer-like conditions. The June contract price fluctuated from $4.32 to $4.385 during the session.

Front-month gasoline also gained three cents to end the day at $3.02 a gallon. June gasoline peaked at $3.02 and bottomed out at $2.94.