Oil prices rose on Thursday as traders digested United States government figures showing a large increase in crude inventories but a drop in gasoline stocks ahead of the driving season.
While strong builds in supplies normally have a bearish pull, analysts said lag times in converting crude to refined consumer products — particularly gasoline — worked against too much of a fall in prices, along with lingering fears that the Organisation of Petroleum Exporting Countries (Opec) will cut production if prices fall too far.
Light, sweet crude on the New York Mercantile Exchange was up 15 cents at $54,14 a barrel by midday in Europe. Heating oil dropped three-fourths of a cent to $1,5990 a gallon (3,8 liters), while unleaded gasoline was down less than half a cent at $1,5940 a gallon.
On Wednesday, the US Energy Department said in its weekly petroleum supply report that the nation’s inventory of crude oil grew by 5,4-million barrels last week to 314,7-million barrels, or 9% above year-ago levels.
Gasoline inventories fell by 2,9-million barrels last week to 214,4-million barrels, or 6% above year-ago levels, the agency said. The supply of distillate fuel, which includes diesel and heating oil, dropped by 1,1-million barrels to 103,4-million barrels, or 2% below last year’s level.
”Crude oil keeps rolling into key consuming markets, but refiners have been slow to convert it into enough gasoline and heating oil to rebuild product stocks. And tight product markets are helping soften downward price reactions to the crude stock builds,” Energy Intelligence, which reports on the global energy industry, said on its website.
It said that while US supply data drove futures prices down on Wednesday, the reaction to the stock rise ”was mostly undone by a late gasoline price rally”.
Noting that gasoline supplies were down, Adam Sieminski of Deutsche Bank in London said: ”There is a lot of concern about the upcoming driving season.
”Summer driving is tending to thwart things, and despite the crude build there is still a view that says Opec is willing to cut to support prices,” he added.
Ng Weng Hoong, a Singapore-based analyst with EnergyAsia Report, said the recent price pullback could extend into April, ”but this could be merely setting the stage for another strong run-up”.
”The $60 mark is the next barrier waiting to be crashed. With few signs of a global economic slowdown, no one is predicting an oil-price crash just yet, as the markets move into the traditionally weak demand second quarter,” he wrote in an e-mail.
The US government’s latest supply snapshot shows that refineries are running at 91% of their output capacity and that imports of crude have averaged 10,2-million barrels a day over the past month, compared with 9,9-million barrels a year earlier.
In the latest signal that Opec considers the market under control, Qatar’s Oil Minister, Abdullah bin Hamad Al Attiyah, said there are no supply problems and that he does not expect the group to meet before June, as scheduled.
Opec agreed earlier this month to raise production quotas by 500 000 barrels per day and said it would consult on whether to increase them by a further 500 000 if prices continued to rise. It recently decided against such immediate action.
Worldwide demand is forecast by the International Energy Agency to rise by 2,2% this year to an average of 84,3-million barrels a day.
While oil prices are roughly 47% higher than a year ago, Nymex futures would need to surpass $90 a barrel to approach the inflation-adjusted high set in 1980. — Sapa-AP