Oil Climbs Back to Near $76
07/25/07 - 03:48 PM EDT
Chuck Marvin
Energy futures rode an upward wave of momentum Wednesday at the New York Mercantile Exchange and were sharply higher late in the session.
September light sweet crude climbed $2.48 to $75.93 a barrel, and reformulated gasoline edged 5 cents ahead to $2.09 a gallon. Heating oil rose 4 cents to $2.07 a gallon. The near-term natural gas contract was up 8 cents at $5.94 per million British thermal units. Upon the release of bullish new inventory figures by the Energy Information Administration, crude oil broke from its intraday trading range and scampered for higher ground. Crude stores fell by 1.1 million barrels during the week ended July 20. Analysts were expecting a slightly larger draw of 1.4 million barrels. However, the narrow miss wasn't enough to overcome traders' sentiment that U.S. refineries are finally starting to eat up crude reserves and convert them into petroleum products. The EIA figures support this notion. Gasoline stores grew by 793,000 barrels. Analysts had been expecting a 125,000-barrel draw. Distillates grew by 1.4 million barrels, handily beating estimates of a 750,000-barrel injection. Refinery utilization climbed to 91.7% from 91%. Although utilization rates remain well below normal for this time of year, current rates are allowing refiners to catch up on their production levels for petroleum products. "The increase in refinery utilization will increase demand for crude in the near term," said Gene McGillian, analyst at TFS Energy. "Also, recent profit-taking shaved 3% off the price of crude and forced out most of the weak longs. Today's news from EIA caused those longs to get back in the market."
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