Oil prices reached record highs for the seventh straight session today after refineries in California and Texas said they had new outages and the government reported surprisingly large declines in oil inventories.
While oil futures jumped to a new trading high of $82.51 a barrel in the moments after the inventory report was released in the morning, they spent much of the day alternating between gains and losses before reports of refinery outages led to late-session buying.
Light, sweet crude for October delivery rose 42 cents to settle at a record $81.93 a barrel on the New York Mercantile Exchange.
Dow Jones Newswires reported that ExxonMobil Corp. shut down a crude processing unit at its 348,000 barrel-a-day refinery in Beaumont and that a piece of gasoline-making equipment at Chevron's 266,000 barrel-a-day refinery in El Segundo, Calif., had been shut down. The impact on production was unclear.
Meanwhile, analysts said today's report from the Energy Department's Energy Information Administration was mixed. Crude inventories fell last week, but much of that decline appears to be because Hurricane Humberto disrupted shipping and refinery operations along the Gulf Coast, said Tim Evans, an analyst at Citigroup Inc.
Crude inventories fell by 3.8 million barrels during the week ended Sept. 14, the EIA said, more than double the 1.5 million-barrel decline analysts surveyed by Dow Jones Newswires, on average, had expected. However, crude inventories remain at the upper end of their average range for this time of year, the EIA said.
Crude supplies dropped much more along the Gulf than at the key Nymex delivery point of Cushing, Okla.
"It's perhaps less of a support to the market than it might appear at first glance," Evans said.
Refinery utilization fell by 0.9 percentage point to 89.6 percent of capacity. Analysts expected a decline of 0.5 percentage point. However, gasoline supplies rose by 400,000 barrels, the EIA said, countering analyst predictions of a 1.3 million-barrel decline.
Evans attributed that increase to higher gasoline production and lower demand. Despite the decline in refinery utilization, gasoline production rose by 159,000 barrels a day, on average. Demand, meanwhile, fell by 146,000 barrels last week.
"Demand is a little bit languid at this point," said Linda Rafield, senior oil analyst at Platts, the energy research arm of McGraw-Hill Cos.
Many analysts attribute the lower demand to high gas prices and the end of the peak summer driving season. At the pump, gas prices rose 0.3 cent overnight to a national average of $2.79 a gallon, according to AAA and the Oil Price Information Service. Gas prices, which typically lag the futures market, peaked at $3.227 a gallon in late May.
The EIA also reported that distillate inventories, which include heating oil and diesel fuel, rose by 1.5 million barrels last week, more than the 1.1 million analysts expected.
Heating oil futures rose 0.3 cent to settle at $2.2453 a gallon.
Crude oil imports averaged 9.8 million barrels last week, an increase of 242,000 barrels per day. Gasoline imports averaged 1 million barrels a day, down slightly from a week earlier. Oil and natural gas investors appeared unconcerned about tropical weather systems near Florida and in the central Atlantic. Nymex natural gas futures fell 38.8 cents to settle at $6.18 per 1,000 cubic feet.
While the National Hurricane Center says the Florida system could enter the Gulf of Mexico and develop into a stronger tropical storm over the next several days, traders don't see the threat to critical oil and gas installations as imminent, Evans said.
However, companies including Royal Dutch Shell PLC, BP and Chevron Corp. said they would evacuate nonessential personnel from installations in the Gulf as a precaution.
While oil futures jumped to a new trading high of $82.51 a barrel in the moments after the inventory report was released in the morning, they spent much of the day alternating between gains and losses before reports of refinery outages led to late-session buying.
Light, sweet crude for October delivery rose 42 cents to settle at a record $81.93 a barrel on the New York Mercantile Exchange.
Dow Jones Newswires reported that ExxonMobil Corp. shut down a crude processing unit at its 348,000 barrel-a-day refinery in Beaumont and that a piece of gasoline-making equipment at Chevron's 266,000 barrel-a-day refinery in El Segundo, Calif., had been shut down. The impact on production was unclear.
Nymex gasoline rose 3.31 cents to settle at $2.0934 a gallon.
Meanwhile, analysts said today's report from the Energy Department's Energy Information Administration was mixed. Crude inventories fell last week, but much of that decline appears to be because Hurricane Humberto disrupted shipping and refinery operations along the Gulf Coast, said Tim Evans, an analyst at Citigroup Inc.
Crude inventories fell by 3.8 million barrels during the week ended Sept. 14, the EIA said, more than double the 1.5 million-barrel decline analysts surveyed by Dow Jones Newswires, on average, had expected. However, crude inventories remain at the upper end of their average range for this time of year, the EIA said.
Crude supplies dropped much more along the Gulf than at the key Nymex delivery point of Cushing, Okla.
"It's perhaps less of a support to the market than it might appear at first glance," Evans said.
Refinery utilization fell by 0.9 percentage point to 89.6 percent of capacity. Analysts expected a decline of 0.5 percentage point. However, gasoline supplies rose by 400,000 barrels, the EIA said, countering analyst predictions of a 1.3 million-barrel decline.
Evans attributed that increase to higher gasoline production and lower demand. Despite the decline in refinery utilization, gasoline production rose by 159,000 barrels a day, on average. Demand, meanwhile, fell by 146,000 barrels last week.
"Demand is a little bit languid at this point," said Linda Rafield, senior oil analyst at Platts, the energy research arm of McGraw-Hill Cos.
Many analysts attribute the lower demand to high gas prices and the end of the peak summer driving season. At the pump, gas prices rose 0.3 cent overnight to a national average of $2.79 a gallon, according to AAA and the Oil Price Information Service. Gas prices, which typically lag the futures market, peaked at $3.227 a gallon in late May.
The EIA also reported that distillate inventories, which include heating oil and diesel fuel, rose by 1.5 million barrels last week, more than the 1.1 million analysts expected.
Heating oil futures rose 0.3 cent to settle at $2.2453 a gallon.
Crude oil imports averaged 9.8 million barrels last week, an increase of 242,000 barrels per day. Gasoline imports averaged 1 million barrels a day, down slightly from a week earlier. Oil and natural gas investors appeared unconcerned about tropical weather systems near Florida and in the central Atlantic. Nymex natural gas futures fell 38.8 cents to settle at $6.18 per 1,000 cubic feet.
While the National Hurricane Center says the Florida system could enter the Gulf of Mexico and develop into a stronger tropical storm over the next several days, traders don't see the threat to critical oil and gas installations as imminent, Evans said.
However, companies including Royal Dutch Shell PLC, BP and Chevron Corp. said they would evacuate nonessential personnel from installations in the Gulf as a precaution.
Via| Associated Press
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