Economy- Crude-Oil Futures Trim Gains as EIA Data Show Demand Weakness – Wall Street Journal

Posted: March 20, 2013 in Uncategorized

Mar. 20, 2013

NEW YORK–Crude-oil futures prices trimmed earlier gains Wednesday, after U.S. weekly data showed implied oil demand fell last week to its lowest level since Jan. 4.

The Energy Information Administration reported U.S. crude-oil stocks fell by a surprise 1.3 million barrels in the week ended March 15, against analysts expectations for a rise of 1.7 million barrels. Still, traders noted the bulk of the drop occurred in the isolated West Coast market, which isn’t indicative of the national trend.

Ordinarily, a big swing in crude inventories would send prices higher, but traders had strong reason to shake off the first drop in nationwide stocks after a gain of nearly 24 million barrels in the previous nine weeks. At 382.7 million barrels, crude stocks now are 12%, or 41 million barrels, above the five-year average, the biggest surplus since Jan. 13.

Refiner demand for crude oil rose 520,000 barrels a day to a two-month high, but the gain came from the lowest level of crude runs in two years.

The biggest concern in the EIA data was a sign demand in the world’s biggest oil consumer “is pretty weak,” said Carl Larry, president of Oil Outlooks and Opinions. “It hasn’t really jumped at all, and that’s hard to justify when we’ve been seeing some stronger economic numbers.”

Implied U.S. oil demand averaged 17.765 million barrels a day, down 4.5%, or 832,000 barrels a day, from a week earlier, and the lowest since Jan. 4. Demand for gasoline, the most widely used petroleum products in the nation, fell 303,000 barrels a day in the week, to a two-month low of 8.324 million barrels a day.

Light, sweet crude oil for April delivery on the New York Mercantile Exchange was trading seven cents higher, at $92.30 a barrel, ahead of expiration at the settlement and well below the intraday high of $93.11. The May contract was eight cents higher, at $92.60 a barrel, after hitting $93.50 earlier.

ICE North Sea Brent crude oil for May delivery was up 47 cents, at $107.92 a barrel.

EIA said gasoline stocks fell 1.476 million barrels, against expectations of a drop of two million barrels. April-delivery reformulated gasoline futures were trading 0.31 cent lower, at $3.042 a gallon.

April heating oil was 1.02 cents higher, at $2.8743 a gallon. EIA said distillate stocks (heating oil/diesel) fell 672,000 barrels, near the expected drop of 900,000 barrels.


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