New Oil Contract Debuts Higher

Crude futures crept higher Wednesday on the New York Mercantile Exchange, buoyed by an anticipated spike in demand as U.S. refineries build their motor gasoline inventories.

The July light sweet crude contract, which became the near-term contract after the June contract expired Tuesday, closed 26 cents higher at $65.77 a barrel.

Reformulated gasoline was unchanged at $2.31 a gallon. Heating oil rose 3 cents to $1.93 a gallon, and natural gas slid 4 cents to $7.76 per million British thermal units.

Crude oil futures managed to book gains even though the Energy Information Administration released inventory figures for the week ended May 18 that were more bearish than analysts were expecting.

Oil stores grew by 2 million barrels during the week, whereas analysts were expecting a 600,000 barrel build. Motor gasoline stores gained 1.4 million barrels, compared with a 1.2 million barrel increase that analysts were expecting.

Distillate stores grew by 512,000 barrels, less than the 1.3 million barrels that were estimated. Refinery utilization grew by 1.6 percentage points during the week to 91.1%, bringing it over the important 90% hurdle for the first time this year.

Although the growth in crude stores would suggest lower prices, analysts are forecasting that demand for oil will continue to grow as refinery utilization rates and motor-gasoline demand increase going into the summer driving season. That sentiment allowed crude prices to climb.