NEW YORK (
) -- Crude prices got a lift from a Fed-inspired equity rally and a weakening dollar, as the government reported a better-than-expected drawdown in gasoline stockpiles.
Crude oil for April delivery, the most actively traded contract on the Nymex, gained $1.14 to settle at $80, again testing a price wall that has stalled the contract in recent days.
The Energy Information Administration on Wednesday morning estimated crude oil stockpiles rose by 3 million barrels last week, which outpaced a forecast from Platts calling for a 2 million-barrel build. Distillate stocks also declined by 600,000 barrels, though analysts anticipated a steeper 1.56 million barrel drop.
But Gene McGillian, an analyst at Tradition Energy, said it "seems like
investors were lasering in on gasoline" as a guide, sending crude prices higher after the government reported a 900,000 barrel drop in gasoline inventory. Analysts had anticipated a slimmer 200,000 barrels to be shed from inventory.
The gasoline contract for April delivery rose 4 cents to settle at $2.21 a gallon, while the April heating oil contract added a penny to $2.05 a gallon.
Also supporting the rally today, McGillian said the "equity market move was spilling over," along with weakness in the greenback. Stocks moved higher after Fed Chairman
Ben Bernanke told the House Financial Services Committee the central bank would keep its fed funds rate "exceptionally low" for "an extended period." Bernanke also reiterated his earlier statement, saying the recent discount rate hike should not be viewed as a change in monetary policy. Investors interpreted the signal that policy tightening was still far off, forcing the dollar lower and lifting bank stocks. The dollar index, a measure of the buck against a basket of currencies, was recently down by 0.1%, while the
Dow Jones Industrial Average
finished higher by 92 points, or 0.9%, to 10,374.
The NYSE Arca Oil Index gained 0.7%, while the
U.S. Oil Fund
ETF added 1.8%.
Among the major integrated firms,
added 0.9%, 0.4% and 1%, respectively.
The Philadelphia Oil Services Index fell 0.3%, though the main driver was a 5.5% tumble in
shares. The drilling servicer reported earnings that missed the Street view on increasing costs and taxes.
On Thursday morning, the Energy Information Administration is scheduled to release data regarding last week's natural gas stockpiles. Analysts surveyed by Platts expect storage levels to reflect a withdrawal between 168 to 172 billion cubic feet. Ahead of that, the April natural gas contract settled at $4.86 per million British thermal units today after adding 5 cents.
-- Written by Sung Moss in New York