NEW YORK (TheStreet) -- Crude oil futures hit the highest level in more than 14 months Wednesday, even as a government report showed a larger-than-anticipated buildup in oil and fuel supplies.
Crude prices fell after the Energy Information Administration said stockpile levels increased by 1.3 million barrels to 327.3 million barrels for the week ended Jan. 1 -- dashing expectations for a drop of 1.6 million barrels. Futures quickly rebounded, however, as frigid temperatures lifted demand expectations and money poured into commodities spurred by a dollar that fell 0.2% against a basket of currencies. The February delivery contract rose as high as $83.52 during the session before settling up by $1.41, or 1.7%, at $83.18.
The gains came even as the Energy Information Administration said crude inventories at Cushing, Okla., the Nymex contract delivery point, reached an all-time high of 35.67 million barrels.
Gasoline and distillate fuel levels also missed expectations, with the EIA reporting a build of 3.7 million barrels and a fall of only 300,000 barrels, respectively. Refiners shuttered more operations, as refineries operated at 79.9% capacity last week.
Darin Newsom, senior commodities analyst at Telvent DTN, noted that with the crude oil futures contract breaking through the $82 price point Wednesday, the surge higher is "a technical move more than anything else," fueled by those testing further limits. "They are really not paying attention to fundamentals," Newsom added.
Before the data, several reports attributed frigid temperatures throughout the U.S., Asia and Europe as supporting prices of late.
Observers received a hint of the bearish figures on Tuesday afternoon when the American Petroleum Institute estimated that gasoline inventories rose by 5.6 million barrels and distillate fuels saw a buildup of 1 million barrels. Still, unlike the government figures, the industry group reported a 2.3 million-barrel decline in crude stockpiles last week.
U.S. Oil Fund
ETF rose 1.4% to close at $40.97, while the
Oil Service HOLDRs
added 2.7%, to $129.61.
Oil stocks remained broadly higher, with the NYSE Arca Oil Index advancing 0.6% on the day. Shares of
closed ahead by 0.9% and 0.01%, respectively.
Oil service stocks also surged, with the Philadelphia Oil Service Sector Index up 2.7%. Shares of
soared 4.2% and 5% each.
Refiners continued moving higher on a rally that began with a sector upgrade on Monday.
were higher by 1.9% and 2.5%, respectively.
Elsewhere on the Nymex, the February natural gas contract rose 37 cents to settle at $6.01 per million British thermal units. February reformulated gasoline and heating oil for February delivery both added roughly 1 cent to finish at $2.14 a gallon and $2.20 a gallon, respectively.
-- Written by Sung Moss and Melinda Peer in New York