Crude Oil Rebounds From Early Drop

Updated from 11:11 a.m. EDT

Crude oil futures made a dash to higher ground at the New York Mercantile Exchange Tuesday after selling off in the overnight trading session.

Sparking the rally were new analyst predictions of a drop in gasoline stores when the Energy Information Administration's inventory data come out Wednesday morning.

Crude futures traded near the $112-a-barrel level for most of the morning before veering upward to reach an intraday high of $115.70 a barrel around midday. Recently, September West Texas crude was selling for $114.54 a barrel at the Nymex, up $1.67, and Brent was at $113.46 a barrel, a gain of $1.52.

Reformulated gasoline futures wereadding 5 cents at $2.87 a gallon, heating oil was up almost 6 cents at $3.14 a gallon, and near-month natural gas was adding 5 cents at $7.94 per million British thermal units.

A Bloomberg survey revealed that analysts believe gasoline stocks for the week ended Aug. 15 probably fell by 3 million barrels. The survey predicted that the inventory report will also show a 1 million-barrel rise in crude oil stocks and an 850,000-barrel rise in distillate inventories.

The predicted fall in gasoline levels was what alarmed crude markets. Gasoline inventories are already at the low end of their average range for this time of year, and total motor gasoline stocks dropped 6.4 million barrels the week before last.

U.S. refineries are currently operating at around 85% utilization -- an abnormally low rate for this time of year. The recent string of EIA oil demand data showing enormous drops in domestic consumption for reformulated gasoline, diesel fuel and jet fuel is clearly failing to entice U.S. refiners to increase their production rates for petroleum-derived products.

« Previous Page

1 2 3

Next Page »