Oil Prices Recover After U.S. Stockpiles Data
April 26 2017 - 12:54PM
Dow Jones News
By Alison Sider
Oil futures were rising Wednesday after U.S. data showed
refiners continued to gobble up crude oil from storage tanks,
drawing down stockpiles.
U.S. crude futures were recently up 23 cents, or 0.46%, to
$49.79 a barrel on the New York Mercantile Exchange. Brent, the
global benchmark, fell 7 cents, or 0.13%, to $52.03 a barrel on ICE
Futures Europe.
The U.S. Energy Information Administration reported that U.S.
crude inventories fell 3.6 million barrels last week. The draw was
significantly more than analysts and traders were expecting, and a
contrast to the nearly 900,000-barrel increase reported Tuesday
evening by the American Petroleum Institute, an industry group.
In recent days, prices have tumbled amid concerns that
relentlessly rising U.S. output could thwart efforts by the
Organization of the Petroleum Exporting Countries to bring supplies
back in balance with demand. But prices jumped after the figures
showing falling U.S. supplies were released.
"People are going to focus on the draws on stockpiles of crude
more than anything right now," said Mark Waggoner, president of
Excel Futures.
The drop in crude supplies came as refiners returned from
seasonal maintenance and ramped up fuel output sharply. Refinery
utilization of 94.1% is the highest level for this time of year
since April, 2001.
But that sent millions of barrels of gasoline and diesel into
storage as fuelmakers churned out more than consumers could use.
Gasoline stockpiles grew by 3.4 million barrels last week. Diesel
stockpiles also increased unexpectedly, rising by 2.7 million
barrels. In total, stocks of oil and fuel rose by 6.6 million
barrels.
Mr. Waggoner said positive economic data and a stock market
rally have bolstered confidence that the U.S. economy is strong
enough that drivers will take to the roads this summer and soak up
the extra gasoline.
But some analysts are less confident.
"I think this is a very mixed report, and we're advising not to
buy the kneejerk rally," said Chris Kettenmann, chief energy
strategist at Macro Risk Advisors. He said a 515,000 barrel-a-day
increase in net oil imports is a "pretty damning" signal that the
glut of oil isn't easing rapidly enough to justify oil prices above
$50 a barrel.
"The OPEC-led cuts were supposed to usher in an accelerated
drawdown in U.S. inventories," he said. "It's a waiting game. I'm
not willing to wait around."
Gasoline futures fell 2.52 cents, or 1.55%, to $1.5978 a gallon.
Diesel futures fell 0.86 cent, or 0.56%, to $1.5366 a gallon.
Neanda Salvaterra and Jenny W. Hsu contributed to this
article.
Write to Alison Sider at alison.sider@wsj.com
(END) Dow Jones Newswires
April 26, 2017 12:39 ET (16:39 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.