Im buying in the morning...
*API Crude Oil Inventories Decline: Economic
Instant Insight
Market Reaction
Limited.
U.S. crude oil inventories fell unexpectedly
last
week, a report from the American Petroleum Institute
showed. The
1.47 million-barrel, or 0.4 percent,
decline came even as imports
surged 14 percent.
The report, issued after the end of floor trading of
oil
futures, also showed increases in inventories of both
gasoline
and distillate fuels.
Crude oil for July delivery
was little changed at $16.57 a
barrel, down 8
cents, in electronic trading on the New
York
Mercantile Exchange after the report was issued. Gasoline
and
heating oil futures also were little
changed.
Behind the Numbers
Crude oil inventories fell to
330.9 million barrels during
the week ended May 28,
the API said, as refinery operations
were
unchanged from a week earlier at 96.7 percent of
capacity.
The API revised the inventory figure for the
previous week,
raising it by 339,000 barrels.
Nine
analysts surveyed by Bloomberg News had expected
gains
ranging, on average, from 300,000 barrels and 1.3
million
barrels. Five analysts expected a gain and two a
decline.
The drop in crude supplies came as imports rose
by
1.10 million barrels a day to 8.86 million barrels a
day.
Gasoline inventories rose 2.32 million barrels
to
222.3 million barrels, the API said. Analysts were
divided on
whether gasoline supplies rose or fell,
with forecasts ranging
from a decline of 600,000
barrels to an increase of 200,000
barrels.
Gasoline imports rose by 145,000 barrels a day to
369,000
barrels a day. Implied demand for gasoline, derived from
figures
in the API report, was little changed at 8.73
million barrels a
day, an increase of 116,000 barrels
a day.
Distillate fuel inventories rose 1.94
million barrels to
132.6 million barrels. Analysts
expected gains ranging, on
average, from 1.1 million
barrels to 1.6 million barrels. Within
the distillate
fuel category, heating oil supplies rose by
1.07
million barrels, while diesel supplies rose by
869,000
barrels.
What Experts Say
``The crude draw was surprising,
but the gasoline number was
a disappointment for
those expecting a bullish report,'' said
John
Kilduff, senior vice president of energy risk management
at
Fimat USA Inc. in New York.
The unchanged refinery
utilization figure was ``OK, but it's
going to come down,
as more and more refiners cut back. That
means
there will be less of everything down the road, and
that's
good for the complex. All in all, it's moderately
bullish, given
the crude number.''
Market
Trend
Crude oil prices fell 32 percent in 1998,
touching a 12-year
low of $10.35 a barrel in December,
as output cuts pledged by
major producers failed
to eliminate a worldwide glut. Prices
rebounded
this year, reaching a 17-month high of $19.05 on May
5
following more supply cuts from the Organization of
Petroleum
Exporting Countries and other producers.
Prices could
recover on signs that Asia is slowly recovering
from
more than a year of weak oil consumption and that OPEC
is
sticking to its promise to reduce output. OPEC made 91
percent of
its pledged cuts during May, according to a
Bloomberg survey of
traders and
analysts.
Jun/02/1999 18:34