Commodity Corner: Predicted Stockpile Decline, Retail Data Boost Oil
August crude oil futures rallied Wednesday on expectations that the U.S. Government and the American Petroleum Institute will report lower inventories.
Oil settled at $74.07 a barrel Wednesday, up $2.09 from the previous session, after trading from $71.44 to $73.95. Traders found encouragement from a Platts survey of analysts anticipating a 3.5 million-barrel decline in U.S. crude oil stocks. API was scheduled to release its data for the week ending July 2 later on Wednesday. The U.S. Energy Department, meanwhile, is set to report its findings for the same period on Thursday. According to a Platts analyst, the projected decline in inventories stems from production shut-ins in the Gulf of Mexico along with a two-day closure of the Louisiana Offshore Oil Port (LOOP) both a result of Hurricane Alex last week.
Adding to the momentum behind crude oil was a positive economic indicator regarding U.S. retail sales. The International Council of Shopping Centers-Goldman Sachs (ICSC-GS) index of chain store sales rose 1% week-on-week for the week ending July 3, the ICSC reported Wednesday. In addition, ICSC reported that the pace of spending at chain stores increased to 3.9% compared to the same period last year. The 3.9% figure reportedly is the strongest year-over-year pace since the 4.3% increase posted on May 8.
Also on the ascent Wednesday was the price of gasoline, which rose six cents to settle at $2.03 a gallon. Gasoline peaked at $2.03 and bottomed out at $1.96.
Natural gas futures for August delivery sank to $4.57 per thousand cubic feet, compared to $4.68 on Tuesday. The intraday range for gas was $4.57 to $4.78.