Crude Under $68 After EIA Report: Oil Alert

The Energy Information Administration says oil stockpiles dropped by 400,000 barrels last week.

Author:: David Moss
Publish date:: Sep 2, 2009 1:09 PM EDT

NEW YORK (

) -- Following an early morning slide, oil prices veered into positive territory before again moving below $68 after the federal government's release of oil supply figures.

The Energy Information Administration said that crude inventories, which offer an idea of demand, fell by 400,000 barrels last week to come to 343.4 million barrels. According to a Platts poll, many were forecasting a 1.9 million barrel fall.

In the afternoon, the front-month contract for benchmark crude was trading at $67.88 on the New York Mercantile Exchange after losing 17 cents.

But the headlining figure may be the steeper-than-expected 3 million barrel fall in gasoline inventories. The EIA also said propane and propylene stockpiles fell by 1.6 million barrels, while distillate fuel inventories grew by 1.2 million barrels last weak.

Last week, the EIA said that oil stockpiles grew by 200,000 barrels the week prior, missing estimates of a drop and sending the front-month contract price plummeting.

But oil watchers may also be looking warily at other economic recovery data, which remain mixed. Earlier, an unemployment report from

American Data Processing

(ADP) - Get Report

showed

a loss of 298,000 private-sector jobs in August. The disappointing jobs figures, along with a smaller-than-expected rise in factory orders, muted stock market activity today.

Though yesterday the Institute for Supply Management reported that

manufacturing activity expanded in August as well.

Elsewhere, shares for the major oil operators were on the plus-side in the afternoon.

Exxon Mobil

(XOM) - Get Report

Chevron

(CVX) - Get Report

and

ConocoPhillips

(COP) - Get Report

were adding 0.5%, 0.6% and 1.1%, respectively.

Marathon Oil