This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Oil Prices Rebound on Inventory Data

NEW YORK ( TheStreet) -- Oil prices sprung back to positive territory Wednesday morning, after a deep plunge below $80 the day before, as energy traders responded enthusiastically to an unexpected draw in weekly crude oil stocks and the Federal Reserve's latest update on reviving the economy.

West Texas Intermediate light sweet crude oil for September delivery was rising $1.32 to $80.62 a barrel, while the September Brent crude oil contract was popping $2.11 to $104.68.

The Federal Reserve said on Tuesday that it would keep the benchmark interest rate at near-zero levels until mid-2013 in its latest bid to sustain the economic recovery.

"That did not seem like enough at first ... and the DJIA sold off 150 points in the aftermath of the comments," Cameron Hanover analysts noted. "But, that was hardly the full story on Tuesday. It took traders an hour to parse the Fed's comments and, as traders mulled it over, they became more bullish over the Fed's comments."

"Ten-year bonds reacted in such a way that traders thought the Fed had achieved QE3 without buying a single bond."

The Federal Reserve news overlapped with the Internal Energy Agency's decision to trim its global oil demand forecast for 2011 on concerns of higher prices and slowing economic growth.

However, the agency raised its estimate for oil demand growth in 2012 "due to oil-fired power needs in Japan."

Meanwhile, the American Petroleum Institute said late Tuesday that there was a large, 5.2 million barrel decline in crude oil inventories in the week ended Aug. 5. Analysts were generally expecting a build of 1.8 million barrels, according to a Platts survey of analysts.

The U.S. Department of Energy's weekly update on crude oil inventories is scheduled for 10:30 am ET.

"The cup of positive sentiment overfloweth into the crude complex overnight, meaning we approach this morning's weekly U.S. inventory report with hefty gains," commented Summit Energy analyst Matt Smith.

Energy stocks were trading in mixed territory. Chevron (CVX - Get Report) was falling 3.1% to $90.50; Exxon (XOM - Get Report) was sliding 3.1% to $68.99; Marathon Oil (MRO - Get Report) was up 0.2% to $25.53; Hess (HES - Get Report) was tumbling 2.4% to $54.67; Occidental Petroleum (OXY - Get Report) was losing 3.2% to $81.75; Double Eagle Petroleum (DBLE) was rising 1.3% to $8.46; and Anadarko Petroleum (APC - Get Report) was declining 2.8% to $66.33.

-- Written by Andrea Tse in New York.

>To contact the writer of this article, click here: Andrea Tse.
Copyright 2011 Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
APC $52.76 -0.83%
DBLE $1.19 0.85%
CVX $102.18 -0.21%
HES $59.62 0.74%
MRO $14.09 -1.81%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs