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Oil down as supplies of gasoline, other fuels grow
Source: Agencies |
December 9, 2010, Thursday
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OIL prices fell yesterday after the government said supplies of gasoline and other energy products rose last week as refineries increased production.
International issues also affected oil prices amid lingering speculation about Europe's financial crisis and the possibility that China, a huge importer of oil, could take more steps to control inflation. That could affect global demand.
Benchmark oil for January delivery lost 41 cents to settle at US$88.28 a barrel on the New York Mercantile Exchange, a day after briefly topping US$90 a barrel. Several analysts expect oil prices to stay between US$85 a barrel and US$90 a barrel for the near future.
Meanwhile, Americans watched the national average for regular gasoline rise to US$2.968 a gallon yesterday, according to AAA, Wright Express and the Oil Price Information Service. That's 11.4 cents more than a month ago and about 33 cents more than a year ago. The average price could reach US$3 a gallon, or higher, before the end of the year, depending on how oil prices move in the coming days.
The Energy Department said commercial crude oil inventories declined by 3.8 million barrels to 355.9 million barrels for the week ending Dec. 3. Gasoline reserves rose by 3.8 million barrels to 214 million barrels, while demand dipped 0.7 percentage point to an average of 9 million barrels a day. Supplies of distillate fuel, which include diesel and heating oil, increased by 2.2 million barrels to 160.2 million barrels.
All three remain near or above the average range for this time of year, the Energy Information Administration said.
U.S. refineries cranked up operations last week, running at 87.5 percent of total capacity on average, compared with 82.6 percent in the prior week.
The gains in distillates and gasoline stockpiles may not support oil prices unless there is "a big spurt of economic activity," said Mike Zarembski, a senior commodity analyst at brokerage OptionsXpress Inc.
Plentiful supplies of gasoline during the winter will help keep a lid on oil and other energy prices, he said.
The dollar was stronger against other currencies on yesterday. A stronger dollar makes commodities like oil, which are priced in dollars, less appealing to buyers who use foreign currencies.
In other Nymex trading in January contracts, heating oil slipped 0.95 cent to settle at US$2.4607 a gallon, gasoline futures lost 1.84 cents to settle at US$2.3046 a gallon and natural gas added 21.3 cents to settle at US$4.606 per 1,000 cubic feet.
In London, Brent crude fell 62 cents to settle at US$90.77 a barrel on the ICE Futures exchange.
International issues also affected oil prices amid lingering speculation about Europe's financial crisis and the possibility that China, a huge importer of oil, could take more steps to control inflation. That could affect global demand.
Benchmark oil for January delivery lost 41 cents to settle at US$88.28 a barrel on the New York Mercantile Exchange, a day after briefly topping US$90 a barrel. Several analysts expect oil prices to stay between US$85 a barrel and US$90 a barrel for the near future.
Meanwhile, Americans watched the national average for regular gasoline rise to US$2.968 a gallon yesterday, according to AAA, Wright Express and the Oil Price Information Service. That's 11.4 cents more than a month ago and about 33 cents more than a year ago. The average price could reach US$3 a gallon, or higher, before the end of the year, depending on how oil prices move in the coming days.
The Energy Department said commercial crude oil inventories declined by 3.8 million barrels to 355.9 million barrels for the week ending Dec. 3. Gasoline reserves rose by 3.8 million barrels to 214 million barrels, while demand dipped 0.7 percentage point to an average of 9 million barrels a day. Supplies of distillate fuel, which include diesel and heating oil, increased by 2.2 million barrels to 160.2 million barrels.
All three remain near or above the average range for this time of year, the Energy Information Administration said.
U.S. refineries cranked up operations last week, running at 87.5 percent of total capacity on average, compared with 82.6 percent in the prior week.
The gains in distillates and gasoline stockpiles may not support oil prices unless there is "a big spurt of economic activity," said Mike Zarembski, a senior commodity analyst at brokerage OptionsXpress Inc.
Plentiful supplies of gasoline during the winter will help keep a lid on oil and other energy prices, he said.
The dollar was stronger against other currencies on yesterday. A stronger dollar makes commodities like oil, which are priced in dollars, less appealing to buyers who use foreign currencies.
In other Nymex trading in January contracts, heating oil slipped 0.95 cent to settle at US$2.4607 a gallon, gasoline futures lost 1.84 cents to settle at US$2.3046 a gallon and natural gas added 21.3 cents to settle at US$4.606 per 1,000 cubic feet.
In London, Brent crude fell 62 cents to settle at US$90.77 a barrel on the ICE Futures exchange.
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