By Nesa Subrahmaniyan
July 31 (Bloomberg) -- Crude oil traded above $126 a barrel in New York after rising the most since July 10 on data showing U.S. gasoline inventories fell for the first time in five weeks.
Gasoline supplies dropped 3.53 million barrels to 213.6 million barrels last week, the U.S. Energy Department said yesterday, compared with a rise of 350,000 barrels estimated in a Bloomberg News survey. Crude-oil supplies declined less than forecast, while refiners kept operating rates little changed from a week ago because of reduced returns from making gasoline.
``The stats came out bullish and exceeded expectations, and at $120, a lot of buying came in to prop up the market,'' said Victor Shum, senior principal at Purvin & Gertz Inc. in Singapore. ``The gasoline draw is related to the negative refining margins and that's how refining economics work.''
Crude for September delivery traded at $126.58 a barrel, down 19 cents at 9:12 a.m. Singapore time. Prices are up 75 percent from a year ago. Futures gained $4.58, or 3.8 percent, to settle at $126.77 yesterday, the highest close since July 22. They touched $120.42 on July 29, the lowest since May 6.
Crude supplies declined 81,000 barrels to 295.2 million barrels last week, the Energy Department report showed. A 1.3 million-barrel drop was forecast in the Bloomberg News survey.
Inventories of distillate fuel rose 2.4 million barrels to 130.5 million barrels last week. A gain of 2.05 million was forecast, according to the median of 12 analysts' estimates. U.S. fuel consumption averaged 20.2 million barrels a day in the past four weeks, down 2.4 percent from a year earlier.
Refinery Operations
U.S. refinery utilization rates reached 87.2 percent compared with 87.1 percent a week earlier and 89.5 percent in the week ended July 11.
Gasoline demand in the U.S. peaks during the summer, when Americans take to the highways for vacations. The so-called driving season lasts from the Memorial Day weekend in late May to Labor Day in early September.
The drop in gasoline inventories last week left stockpiles 3 percent higher than the five-year average for the period, the energy department said.
Gasoline for August delivery rose 12.74 cents, or 4.2 percent, to settle at $3.1351 a gallon in New York, the highest close since July 22. It was the biggest one-day increase since June 11. Prices touched $2.9801 on July 29, the lowest since May 5. Futures reached a record $3.631 a gallon on July 11.
Pump prices are tracking futures. Regular gasoline fell 1.5 cents to $3.926 a gallon on average nationwide, said AAA, the largest U.S. motorist organization, on its Web site. Prices reached a record $4.114 a gallon on July 17.
Goldman Sachs Group Inc., the world's biggest securities firm, said oil will recover to reach $149 a barrel by the end of this year because consumer demand has been ``restrained, but not destroyed,'' by record prices.
Risks to Supply
Iranian Supreme Leader Ayatollah Ali Khamenei said his country will push forward with its nuclear program. The nation's highest authority spoke before a deadline for Iran to reply to an offer from world powers of economic and diplomatic incentives in exchange for the halt of its uranium-enrichment activities.
``Iran will pursue its peaceful nuclear energy,'' state television cited Khamenei as saying yesterday.
Israeli Defense Minister Ehud Barak said on July 29 that options including a military strike are open to his government in dealing with the threat from Iran's nuclear program.
Barak, a former Israeli prime minister, said sanctions on Iran need to be ``accelerated'' and ``ultimately no option can be removed from the table.''
Concern the dispute over the nuclear program might disrupt shipments from Iran has supported prices since January 2006. ``Supply risks are still out there,'' Purvin & Gertz's Shum said.
Nigerian Output Falls
Falling Nigerian output is also supporting prices. Nigeria is now producing less than 1 million barrels of crude a day because of attacks by militants, ThisDay reported, citing an unidentified energy ministry official. Nigeria was the fourth- biggest source of U.S. oil imports in the first five months of the year, according to the U.S. Energy Department.
Before the escalation of militant attacks that began in February 2006, Nigeria pumped as much as 2.6 million barrels a day, the paper said. The country was Africa's biggest oil producer until April when it was surpassed by Angola.
Brent crude oil for September settlement traded at $126.90 a barrel, down 20 cents at 9:15 a.m. Singapore time on London's ICE Futures Europe exchange. The contract rose $4.39, or 3.6 percent, yesterday to settle at $127.10.
To contact the reporter on this story: Nesa Subrahmaniyan in Singapore at nesas@bloomberg.net.
Posts
No comments:
Post a Comment