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Oil prices rise on big drop in US supplies
Source: Agencies |
August 16, 2012, Thursday
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AN unexpectedly large drop in US crude oil inventories pushed the price of oil higher yesterday.
Benchmark oil rose 90 cents to finish at US$94.33 per barrel yesterday in New York, its highest level since mid-May. The Energy Department said stockpiles fell 3.7 million barrels last week to 366.2 million barrels. Analysts had predicted a decline of 1.5 million barrels, according to Platts, the energy information arm of McGraw-Hill.
It marked the third consecutive large weekly decrease in oil supplies. Still, analysts point to production problems and seasonal factors more than increased demand for the declines. But with supplies still above normal for this time of year, any decrease tends to cause a rise in oil prices.
Oil production has been affected by a number of issues this month, including some refinery and pipeline problems in the Midwest and California. Tropical storms have moved through the Gulf of Mexico, closing some oil rigs and slowing oil tankers destined for US ports.
In addition, refiners are selling off inventories to avoid a surplus when they switch to processing winter blends of fuel next month.
"The bigger question is, are these numbers sustainable once these refiners start to come back on line?" Price Futures Group oil analyst Phil Flynn asked.
Brent crude, which is used to price international varieties of oil, gained US$2.22 to end at US$116.25 per barrel in London. The Brent contract expires today. Prices sometimes can be volatile the closer a contract gets to expiration.
Brent is up more than US$13 per barrel this month on concerns about production outages in the North Sea. It's also influenced more by developments in the Middle East. Saudi Arabia, the world's biggest oil exporter, yesterday ordered its citizens to leave Lebanon over kidnapping fears.
Other futures prices on the New York Mercantile Exchange:
- Heating oil rose 5.06 cents to end at US$3.0852 per gallon.
- Gasoline increased 8.26 cents to finish US$3.084 per gallon.
- Natural gas fell 8.6 cents, or 3 percent, to end at US$2.748 per 1,000 cubic feet.
Benchmark oil rose 90 cents to finish at US$94.33 per barrel yesterday in New York, its highest level since mid-May. The Energy Department said stockpiles fell 3.7 million barrels last week to 366.2 million barrels. Analysts had predicted a decline of 1.5 million barrels, according to Platts, the energy information arm of McGraw-Hill.
It marked the third consecutive large weekly decrease in oil supplies. Still, analysts point to production problems and seasonal factors more than increased demand for the declines. But with supplies still above normal for this time of year, any decrease tends to cause a rise in oil prices.
Oil production has been affected by a number of issues this month, including some refinery and pipeline problems in the Midwest and California. Tropical storms have moved through the Gulf of Mexico, closing some oil rigs and slowing oil tankers destined for US ports.
In addition, refiners are selling off inventories to avoid a surplus when they switch to processing winter blends of fuel next month.
"The bigger question is, are these numbers sustainable once these refiners start to come back on line?" Price Futures Group oil analyst Phil Flynn asked.
Brent crude, which is used to price international varieties of oil, gained US$2.22 to end at US$116.25 per barrel in London. The Brent contract expires today. Prices sometimes can be volatile the closer a contract gets to expiration.
Brent is up more than US$13 per barrel this month on concerns about production outages in the North Sea. It's also influenced more by developments in the Middle East. Saudi Arabia, the world's biggest oil exporter, yesterday ordered its citizens to leave Lebanon over kidnapping fears.
Other futures prices on the New York Mercantile Exchange:
- Heating oil rose 5.06 cents to end at US$3.0852 per gallon.
- Gasoline increased 8.26 cents to finish US$3.084 per gallon.
- Natural gas fell 8.6 cents, or 3 percent, to end at US$2.748 per 1,000 cubic feet.
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